ECON/FINA 301 Money and Banking - Midterm 1, September, 2012
Name:
1. (4 points each) Compute the present value of each of the payment streams below with a discount rate of 10%.
(a) $200 per year for 8 years.
(b) $200 per year forever.
(c) $20 per month f
ECON/FINA 301 Money and Banking, Spring 2014, Chris Jensen
Day
Date
Assignment
Tuesday
01.14
Introduction & portfolio game pp. 1-10
Thursday
01.16
2A pp. 12-23
Tuesday
01.21
2B pp. 24-34
Thursday
01.23
3 pp. 37-51 & Initial portfolio-game report due
Tuesd
AW! GM
Ecol" 17'
Midterm 2
Last Name.
First Name
Total Points: 80 6
uestion 1) (18 Total points, 3 points each) Explain clearly what is wrong with the statements below and
why the statement is incorrect.
a) Pollution from a factory producing paper is not
Chapter 8: How banks work
Part A
1. What do we mean by asymmetric information?
2. What is adverse selection? Give an example from banking.
3. What is moral hazard? Provide an example from banking.
4. Textbook problem 3.
5. Textbook problem 4.
6. Textbook
Chapter 10: Economic growth and business cycles
Part A
1. Why is real GDP growth important? What has the U.S. real GDP growth trend been
since 1950?
2. What was the main factor behind the increase in the labor participation rate from the
1960s to the 1990
The Exchange Equation & Ination-Output Trade-O
The equation of exchange is based on the notion that money is needed to
make transactions. If each unit of money is used in V transactions per
period, the total number of transactions that a given amount of m
Chapter 17: Monetary goals and tradeos
Part A
1. What is the dierence between contractionary and expansionary policy? What does
each of these entail in terms of the money supply? In terms of the federal funds rate?
2. Textbook problem 1.
3. Textbook probl
Chapter 16: Monetary control
Part A
1. Textbook problem 1.
2. Textbook problem 2.
3. What is the monetary base?
4. Why can the Fed not determine the money supply directly? What does it have direct
control over?
5. Imagine you worked for a bank that operat
Chapter 14: Economic interdependence
Part A
1. Textbook problem 3.
2. What do exchange rates measure?
3. What does it mean for a currency to depreciate? How does it dier from an appreciation?
4. If the euro appreciates relative to the U.S. dollar, what ha
1.
a)
1
P = F
1
(1+i)N
i
1
P = $200
+
V
(1 + i)N
1
(1+.1)8
+
.1
$0
= $1, 066.99
(1 + .1)8
b)
P =
F
$200
=
= $2, 000
i
.1
c)
1
P = F
1
i
(1+ x )
V
+
i
x
1
P = $20
Nx
1+
i Nx
x
1
612
.1
(1+ 12 )
.1
12
$0
+
1+
.1 612
12
= $1, 079.57
d) The easiest way to d
Econ 224
Fall 2013
Midterm 1
Total Points: 80
Last Name;
First Name
IOU/w 61 Question 1) (15 points) TruelFalse. Explain the reason for your choice. (3 Points each)
1) In the circular ow model, factors of production are the goods and services produced by