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ECO 4223 Study Questions for Final Exam with Answers 100% Verified Correct| Latest Update
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ECO 4223 Study Questions for Final Exam with Answers 100% Verified Correct| Latest Update
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ECO 4223 Study Questions for Final Exam withAnswers 100% Verified Correct| Latest Update
If the Fed increases the rate paid on reserves, banks will tend to hold ___ excess reserves,
which will _____ the money multiplier
A. more; increase
B. more; decrease - ✔✔B
The money supply will increase if the:
A. monetary base increases
B. currency-deposit ratio increases - ✔✔A
We can interpret the monetary base as the:
A. total value of assets in an economy
B. liabilities of the fed to the private sector - ✔✔B
The monetary liabilities of the Fed include:
A. Currency in circulation and loans to financial institutions
B. Currency in circulation and reserves - ✔✔B
When a bank sells a government bond to the Federal Reserve, reserves in the banking system
______ and the monetary base _____
A. decrease, decrease
B, increase, increase - ✔✔B
When the Fed extends a $100 discount loan to the First National Bank, reserves in the banking
system:
, A. increase by $100
B. decrease by $100 - ✔✔A
If the Fed decides to reduce bank reserves, it can:
A. purchase government bonds
B. sell government bonds - ✔✔B
If reserves in the banking system increase by $100, then checkable deposits will increase by
$400 in the simple model of deposit creation when the required reserve ratio is:
A. 0.20
B. 0.25 - ✔✔B
An increase in an asset's expected return relative to that of an alternative asset, ______ the
quantity demanded of the asset:
A. increases
B. decreases - ✔✔A
When the exchange rate for the British pound changes from $1.80 per pound to $1.60 per
pound, then the pound has _____ and _____ expensive
A. depreciated; American wheat sold in Britain becomes more
B. appreciated; British cars sold in the United States becomes more - ✔✔A
Using the Gordon Growth formula, if the most recent dividend payment is $2.00, Ke is 12%, and
g is 10%, then the current stock price is:
A. $100
B. $110 - ✔✔B
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