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Econ 345 Money And Banking Final Exam With Complete Solutions Latest Update 2024
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Econ 345 Money And Banking Final Exam With Complete Solutions Latest Update 2024
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Econ 345 Money And Banking Final Exam WithComplete Solutions Latest Update 2024
A) increases - ANS An increase in an asset's expected return relative to that of an
alternative asset, holding everything else constant, ________ the quantity
demanded of the asset.
A) increases
B) decreases
C) has no effect on
D) erases
B) reduce; real - ANS An increase in the expected rate of inflation will ________
the expected return on bonds relative to the that on ________ assets, everything
else held constant.
A) reduce; financial
B) reduce; real
,C) raise; financial
D) raise; real
D) rises; quantity supplied - ANS The supply curve for bonds has the usual upward
slope, indicating that as the price ________, ceteris paribus, the ________
increases.
A) falls; supply
B) falls; quantity supplied
C) rises; supply
D) rises; quantity supplied
C) below; demand - ANS If the price of bonds is set ________ the equilibrium price,
the quantity of bonds demanded exceeds the quantity of bonds supplied, a
condition called excess ________.
A) above; demand
B) above; supply
,C) below; demand
D) below; supply
B) a decrease in the expected return on bonds relative to other assets - ANS In the
figure above, a factor that could cause the demand for bonds to decrease (shift to
the left) is ________.
A) an increase in the expected return on bonds relative to other assets
B) a decrease in the expected return on bonds relative to other assets
C) an increase in wealth
D) a reduction in the riskiness of bonds relative to other assets
B) right; right - ANS Everything else held constant, during a business cycle
expansion, the supply of bonds shifts to the ________ as businesses perceive more
profitable investment opportunities, while the demand for bonds shifts to the
________ as a result of the increase in wealth generated by the economic
expansion.
A) right; left
, B) right; right
C) left; left
D) left; right
C) excess supply of bonds - ANS In Keynes's liquidity preference framework, if
there is excess demand for money, there is ________.
A) excess demand for bonds
B) equilibrium in the bond market
C) excess supply of bonds
D) too much money
B) falls; money - ANS In Keynes's liquidity preference framework, as the expected
return on bonds increases (holding everything else unchanged), the expected
return on money ________, causing the demand for
________ to fall.
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