Problem one suggests that the yield
percentage rose rather
Other assets $100
Balance Sheet (Mill)
Transaction Deposits $100
Nothing would be affected. If there is an equal
1) What is dollarization?
The process of using a foreign countrys money as a domestic currency. Often this entails a country
adopting the U.S. dollar as a medium of exchange and unit of account.
2) What body within the Federal Reserve m
1) What is a transactions cost that could arise from screening?
Broker commissions, dealer spreads, bank fees, legal fees, search selection, and monitoring costs, and
the opportunity costs of time devoted to investment related activities.
HW1 Chapter 2
1) What is the minimum efficient scale of the business?
Minimum efficient scale of the business is the smallest a business can be and still remain
efficient and/or profitable.
2) What is the difference between liquidity and capital f
HW2 Chapter 3
1) What is the double coincidence of wants?
A- A double coincidence is when each party has something that the other party wants.
(party one must have what party two desires, and vice versa)
2) How many prices would be required
1) What is a unit bank?
A unit bank is a bank without branches. Independently owned.
2) What is a national bank?
A national bank is chartered by the Federal government.
3) Why is commercial paper an example of disintermediation?
Commercial paper are
1) Was the Black Friday stock market crash in 1987 a systemic crisis? Why or why not?
No, it was a nonsystemic crisis because the functions of the market were erratic or inefficient.
2) Explain why an increase in stock pri
Chapter 4 HW
1. On your 70th birthday, you learn that your grandma deposited $50 for you
on the day of your birth in a savings account bearing 5% interest annually.
How much is in this account?
2. You won $1,000,000 in the lottery but unfo
1. If government revenues drop significantly (and remember all else stays the same,
including government expenditures), what will likely happen to bond prices? Why?
If government revenues dropped, I believe that bond prices would drop be