Banking and Financial Intermediation Exam Preparation Guide
Course Introduction
This course explores the fundamental role of banks and other financial intermediaries in modern economies, focusing on how they facilitate the flow of funds between savers and borrowers, manage risks, and contribute to economic stability and growth. Students will examine the structure and operations of various financial institutions, the regulatory environment, and the products and services offered by banks and intermediaries. Topics include asset and liability management, credit creation, risk assessment, recent innovations in financial technology, and the challenges posed by changing global financial landscapes. The course aims to provide students with a comprehensive understanding of how financial intermediation supports economic development and the importance of sound banking practices in maintaining financial system integrity.
Recommended Textbook
Economics of Money Banking and Financial Markets 12th Edition by Frederic S. Mishkin
Available Study Resources on Quizplus
27 Chapters
2796 Verified Questions
2796 Flashcards
Source URL: https://quizplus.com/study-set/1479 Page 2
Chapter 1: Why Study Money, banking, and Financial Markets
Available Study Resources on Quizplus for this Chatper
109 Verified Questions
109 Flashcards
Source URL: https://quizplus.com/quiz/29391
Sample Questions
Q1) The basic concepts used in the analytic framework of this text include all of the following EXCEPT
A)the not-for-profit nature of most financial institutions.
B)a basic supply and demand analysis to explain the behavior of financial markets.
C)an approach to financial structure based on transaction costs and asymmetric information.
D)the concept of equilibrium.
Answer: A
Q2) Financial markets promote economic efficiency by
A)channeling funds from investors to savers.
B)creating inflation.
C)channeling funds from savers to investors.
D)reducing investment.
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: An Overview of the Financial System
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/29402
Sample Questions
Q1) U)S. Treasury bills pay no interest but are sold at a ________. That is,you will pay a lower purchase price than the amount you receive at maturity.
A)premium
B)collateral
C)default
D)discount
Answer: D
Q2) Well-functioning financial markets
A)cause inflation.
B)eliminate the need for indirect finance.
C)cause financial crises.
D)allow the economy to operate more efficiently.
Answer: D
Q3) How do regulators help to ensure the soundness of financial intermediaries?
Answer: Regulators restrict who can set up a financial intermediary,conduct regular examinations,restrict assets,and provide insurance to help ensure the soundness of financial intermediaries.
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: What Is Money
Available Study Resources on Quizplus for this Chatper
99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/29411
Sample Questions
Q1) Compared to an electronic payments system,a payments system based on checks has the major drawback that
A)checks are less costly to process.
B)checks take longer to process,meaning that it may take several days before the depositor can get her cash.
C)fraud may be more difficult to commit when paper receipts are eliminated.
D)legal liability is more clearly defined.
Answer: B
Q2) An electronic payments system has not completely replaced the paper payments system because of all of the following reasons EXCEPT
A)expensive equipment is necessary to set up the system.
B)security concerns.
C)privacy concerns.
D)transportation costs.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: The Meaning of Interest Rates
Available Study Resources on Quizplus for this Chatper
107 Verified Questions
107 Flashcards
Source URL: https://quizplus.com/quiz/29412
Sample Questions
Q1) The price of a consol equals the coupon payment
A)times the interest rate.
B)plus the interest rate.
C)minus the interest rate.
D)divided by the interest rate.
Q2) A $1,000 face value coupon bond with a $60 coupon payment every year has a coupon rate of
A)6 percent
B)5 percent.
C)6 percent.
D)10 percent.
Q3) If you expect the inflation rate to be 4 percent next year and a one year bond has a yield to maturity of 7 percent,then the real interest rate on this bond is A)-3 percent.
B)-2 percent.
C)3 percent.
D)7 percent.
Q4) Your favorite uncle advises you to purchase long-term bonds because their interest rate is 10%. Should you follow his advice?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: The Behavior of Interest Rates
Available Study Resources on Quizplus for this Chatper
165 Verified Questions
165 Flashcards
Source URL: https://quizplus.com/quiz/29413
Sample Questions
Q1) If prices in the diamond market become less volatile,all else equal,then the demand for diamonds ________ and the demand for gold ________.
A)increases;decreases
B)increases;increases
C)decreases;decreases
D)decreases;increases
Q2) If the expected return on bonds increases,all else equal,the demand for bonds increases,the price of bonds ________,and the interest rate ________.
A)increases;decreases
B)increases;increases
C)decreases;decreases
D)decreases;increases
Q3) The risk of a well-diversified portfolio depends only on the ________ risk of the assets in the portfolio.
A)systematic
B)nonsystematic
C)portfolio
D)investment
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: The Risk and Term Structure of Interest Rates
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/29414
Sample Questions
Q1) According to the liquidity premium theory of the term structure,a flat yield curve indicates that short-term interest rates are expected to
A)rise in the future.
B)remain unchanged in the future.
C)decline moderately in the future.
D)decline sharply in the future.
Q2) The ________ of the term structure states the following: the interest rate on a long-term bond will equal an average of short-term interest rates expected to occur over the life of the long-term bond plus a term premium that responds to supply and demand conditions for that bond.
A)segmented markets theory
B)expectations theory
C)liquidity premium theory
D)separable markets theory
Q3) A ________ yield curve predicts a future increase in inflation.
A)steeply upward sloping
B)slight upward sloping
C)flat
D)downward sloping
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter
Expectations, and the Efficient Market Hypothesis
Available Study Resources on Quizplus for this Chatper
101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/29415
Sample Questions
Q1) Loss aversion can explain why very little ________ actually takes place in the securities market.
A)short selling
B)bargaining
C)bartering
D)negotiating
Q2) Financial markets quickly eliminate unexploited profit opportunities through changes in
A)dividend payments.
B)tax laws.
C)asset prices.
D)monetary policy.
Q3) The small-firm effect refers to the A)negative returns earned by small firms.
B)returns equal to large firms earned by small firms.
C)abnormally high returns earned by small firms.
D)low returns after adjusting for risk earned by small firms.
Q4) Your best friend calls and gives you the latest stock market "hot tip" that he heard at the health club. Should you act on this information? Why or why not?
9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: An Economic Analysis of Financial Structure
Available Study Resources on Quizplus for this Chatper
96 Verified Questions
96 Flashcards
Source URL: https://quizplus.com/quiz/29416
Sample Questions
Q1) Which of the following is NOT a benefit to an individual purchasing a mutual fund?
A)reduced risk
B)lower transactions costs
C)free-riding
D)diversification
Q2) A clause in a debt contract requiring that the borrower purchase insurance against loss of the asset financed with the loan is called a
A)collateral-insurance clause.
B)prescription covenant.
C)restrictive covenant.
D)proscription covenant.
Q3) Government regulations require publicly traded firms to provide information,reducing A)transactions costs.
B)the need for diversification.
C)the adverse selection problem.
D)economies of scale.
Q4) Why does the free-rider problem occur in the debt market?
Q5) Explain the principal-agent problem as it pertains to equity contracts.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Banking and the Management of Financial Institutions
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/29417
Sample Questions
Q1) If a bank's liabilities are more sensitive to interest rate movements than are its assets,then
A)an increase in interest rates will reduce bank profits.
B)a decrease in interest rates will reduce bank profits.
C)interest rates changes will not impact bank profits.
D)an increase in interest rates will increase bank profits.
Q2) Bank capital is equal to ________ minus ________.
A)total assets;total liabilities
B)total liabilities;total assets
C)total assets;total reserves
D)total liabilities;total borrowings
Q3) To reduce moral hazard problems,banks include restrictive covenants in loan contracts. In order for these restrictive covenants to be effective,banks must also A)monitor and enforce them.
B)be willing to rewrite the contract if the borrower cannot comply with the restrictions.
C)trust the borrower to do the right thing.
D)be prepared to extend the deadline when the borrower needs more time to comply.
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Economic Analysis of Financial Regulation
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/29392
Sample Questions
Q1) The S&L Crisis can be analyzed as a principal-agent problem. The agents in this case,the ________,did not have the same incentive to minimize cost to the economy as the principals,the ________.
A)politicians/regulators;taxpayers
B)taxpayers;politician/regulators
C)taxpayers;bank managers
D)bank managers;politicians/regulators
Q2) Regular bank examinations and restrictions on asset holdings help to indirectly reduce the ________ problem because,given fewer opportunities to take on risk,risk-prone entrepreneurs will be discouraged from entering the banking industry.
A)moral hazard
B)adverse selection
C)ex post shirking
D)post-contractual opportunism
Q3) Deposit insurance has not worked well in countries with
A)a weak institutional environment.
B)strong supervision and regulation.
C)a tradition of the rule of law.
D)few opportunities for corruption.
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Banking Industry: Structure and Competition
Available Study Resources on Quizplus for this Chatper
138 Verified Questions
138 Flashcards
Source URL: https://quizplus.com/quiz/29393
Sample Questions
Q1) Because of the abuses by state banks and the clear need for a central bank to help the federal government raise funds during the War of 1812,Congress created the A)Bank of United States in 1812.
B)Bank of North America in 1814.
C)Second Bank of the United States in 1816.
D)Second Bank of North America in 1815.
Q2) So-called fallen angels differ from junk bonds in that A)junk bonds refer to newly issued bonds with low credit ratings,whereas fallen angels refer to previously issued bonds that have had their credit ratings fall below Baa.
B)junk bonds refer to previously issued bonds that have had their credit ratings fall below Baa,whereas fallen angels refer to newly issued bonds with low credit ratings.
C)junk bonds have ratings below Baa,whereas fallen angels have ratings below C.
D)fallen angels have ratings below Baa,whereas junk bonds have ratings below C.
Q3) Why did the interest rate volatility of the 1970s spur financial innovation?
Q4) What financial innovations helped banks to get around the bank branching restrictions of the McFadden Act?
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Financial Crises
Available Study Resources on Quizplus for this Chatper
48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/29394
Sample Questions
Q1) When asset prices rise above their fundamental economic values,a(n)________ occurs.
A)asset-price bubble
B)liability war
C)decline in lending
D)decrease in moral hazard
Q2) One suggested method of dealing with the too-big-to-fail problem is to reimpose the restrictions that were in place under
A)Glass-Steagall.
B)McFadden.
C)the Edge Act.
D)the Federal Reserve Act.
Q3) In a bank panic,the source of contagion is the A)free-rider problem.
B)too-big-to-fail problem.
C)transactions cost problem.
D)asymmetric information problem.
Q4) Typically,the economy recovers fairly quickly from a recession. Why did this NOT happen in the United States during the Great Depression?
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Central Banks and the Federal Reserve System
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/29395
Sample Questions
Q1) Of all commercial banks,about ________ belong to the Federal Reserve System.
A)10%
B)one half
C)one third
D)90%
Q2) Subject to the approval of the Board of Governors,the decision of choosing the president of a district Federal Reserve Bank is made by
A)all nine district bank directors.
B)the six district bank directors elected by the member banks.
C)three district bank directors who are professional bankers.
D)district bank directors who are not professional bankers.
E)class A and class B directors.
Q3) The central bank which is generally regarded as the most independent in the world because its charter cannot be changed by legislation is the A)Bank of England.
B)Bank of Canada.
C)European Central Bank.
D)Bank of Japan.
Q4) Make the case for and against an independent Federal Reserve.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: The Money Supply Process
Available Study Resources on Quizplus for this Chatper
218 Verified Questions
218 Flashcards
Source URL: https://quizplus.com/quiz/29396
Sample Questions
Q1) Everything else held constant,an increase in the required reserve ratio will result in ________ in M1 and ________ in M2.
A)an increase;an increase
B)an increase;a decrease
C)a decrease;an increase
D)a decrease;a decrease
Q2) Everything else held constant,a decrease in holdings of excess reserves will mean
A)a decrease in the money supply.
B)an increase in the money supply.
C)a decrease in checkable deposits.
D)an increase in discount loans.
Q3) Everything else held constant,an increase in wealth will cause the holdings of checkable deposits to the holdings of currency to ________ and the currency ratio will
A)increase;increase
B)increase;decrease
C)decrease;increase
D)decrease;decrease
To view all questions and flashcards with answers, click on the resource link above.
16
Chapter 15: Tools of Monetary Policy
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/29397
Sample Questions
Q1) In the market for reserves,when the federal funds rate is above the interest rate paid on excess reserves,the demand curve for reserves is
A)vertical.
B)horizontal.
C)positively sloped.
D)negatively sloped.
Q2) The two types of open market operations are
A)offensive and defensive.
B)dynamic and reactionary.
C)active and passive.
D)dynamic and defensive.
Q3) From before the financial crisis began in September of 2007 to when the crisis was over at the end of 2009,the huge expansion in the Fed's balance sheet and the monetary base did not result in a large increase in monetary supply because
A)most of it just flowed into holdings of excess reserve.
B)the Fed also increased the required reserve ratio.
C)the Fed also conducted open market sales.
D)the discount loan decreased.
To view all questions and flashcards with answers, click on the resource link above.
17
Chapter 16: The Conduct of Monetary Policy: Strategy and Tactics
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/29398
Sample Questions
Q1) When asset prices increase above their fundamental values it is called an
A)asset-price bubble.
B)irrational bubble.
C)asset-price spike.
D)irrational spike.
Q2) Suppose interest rates are kept very low for a long time such that there is a spike in the amount of lending. Everything else held constant,this could cause ________ bubble.
A)an irrational exuberance
B)a credit-driven
C)a stock
D)a debt-driven
Q3) The ________ problem of discretionary policy arises because economic behavior is influenced by what firms and people expect the monetary authorities to do in the future.
A)moral hazard
B)time-inconsistency
C)nominal-anchor
D)rational-expectation
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: The Foreign Exchange Market
Available Study Resources on Quizplus for this Chatper
133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/29399
Sample Questions
Q1) If the exchange at time t is E = 1.2/$. You invest $1 in an euro asset at t,which has an interest of 8%. When the asset expires at t+1,you get paid ________. If E +1 = 1.02/$,then your rate of return in terms of is ________%.
A)1.3;8
B)1.3;6
C)1.08;6
D)1.08;8
Q2) When the exchange rate for the British pound changes from $1.80 per pound to $1.60 per pound,then,holding everything else constant,the pound has ________ and ________ expensive.
A)appreciated;British cars sold in the United States become more
B)appreciated;British cars sold in the United States become less
C)depreciated;American wheat sold in Britain becomes more
D)depreciated;American wheat sold in Britain becomes less
Q3) The exchange rate is
A)the price of one currency relative to gold.
B)the value of a currency relative to inflation.
C)the change in the value of money over time.
D)the price of one currency relative to another.
To view all questions and flashcards with answers, click on the resource link above.
Page 19
Chapter 18: The International Financial System
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/29400
Sample Questions
Q1) When gold production was low in the 1870s and 1880s,the money supply grew ________ causing ________.
A)rapidly;inflation
B)rapidly;disinflation
C)slowly;deflation
D)slowly;disinflation
Q2) Everything else held constant,if a central bank makes an unsterilized ________ of foreign assets,then the domestic money supply will ________ and the domestic currency will depreciate.
A)purchase;increase
B)purchase;decrease
C)sale;increase
D)sale;decrease
Q3) Because central banks have not been willing to give up their option of intervening in the foreign exchange market,the current international financial system can best be described as a
A)variable-pegged exchange rate system.
B)moving-pegged exchange rate system.
C)hybrid of a fixed exchange rate and flexible exchange rate system.
D)flexible-exchange,dollar-pegged exchange rate system.
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Quantity Theory, inflation and the Demand for Money
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/29401
Sample Questions
Q1) If the deficit is financed by selling bonds to the ________,the money supply will ________,causing aggregate demand to ________.
A)public;rise;increase B)public;fall;decrease C)central bank;rise;increase D)central bank;fall;decrease
Q2) In the early 1990s,M2 growth underwent a dramatic ________,which some researchers believe ________ be explained by traditional money demand functions. A)surge;cannot B)surge;can
C)slowdown;cannot D)slowdown;can
Q3) If the money supply is $20 trillion and velocity is 2,then nominal GDP is
A)$2 trillion.
B)$10 trillion.
C)$20 trillion.
D)$40 trillion.
Q4) Describe what the liquidity trap is. Explain how it can be problematic for monetary policymakers.
To view all questions and flashcards with answers, click on the resource
Chapter 20: The Is Curve
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/29403
Sample Questions
Q1) Aggregate demand in an economy with no government or foreign trade is
A)consumer expenditure plus actual investment.
B)consumer expenditure plus planned investment.
C)consumer expenditure plus inventory investment.
D)consumer expenditure plus fixed investment.
Q2) Points on the IS curve satisfy ________ market equilibrium.
A)money
B)goods
C)stock
D)bond
Q3) In the simple Keynesian model,equilibrium aggregate output is determined by
A)aggregate demand.
B)aggregate supply.
C)the national demand for labor.
D)the price level.
Q4) A decrease in interest rates
A)increases the value of the dollar,net exports,and equilibrium output.
B)increases the value of the dollar,reducing net exports and equilibrium output.
C)reduces the value of the dollar,net exports,and equilibrium output.
D)reduces the value of the dollar,increasing net exports and equilibrium output.
Page 22
To view all questions and flashcards with answers, click on the resource link above.
Chapter 21: The Monetary Policy and Aggregate Demand
Curves
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/29404
Sample Questions
Q1) An autonomous easing of monetary policy
A)causes an upward movement along the monetary policy curve.
B)causes a downward movement along the monetary policy curve.
C)shifts the monetary policy curve upward.
D)shifts the monetary policy curve downward.
Q2) The aggregate demand curve is downward sloping because a higher inflation rate leads the central bank to ________ real interest rates,thereby ________ the level of equilibrium aggregate output. ,everything else held constant.
A)raise;lowering
B)raise;raising
C)reduce;lowering
D)reduce;raising
Q3) The Fed's policy actions of reacting to higher inflation by raising the real interest rate during 2004-2006 were
A)upward movements along the monetary policy curve.
B)downward movement along the monetary policy curve.
C)upward shifts of the monetary policy curve.
D)downward shifts of the monetary policy curve.
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Aggregate Demand and Supply Analysis
Available Study Resources on Quizplus for this Chatper
108 Verified Questions
108 Flashcards
Source URL: https://quizplus.com/quiz/29405
Sample Questions
Q1) The more willing monetary policymakers are to raise interest rates when faced with inflation,the ________ the AD curve is,and the ________ responsive equilibrium output is to the inflation rate. A)steeper;more B)steeper;less C)flatter;more D)flatter;less
Q2) A positive spending shock ________ real interest rates and ________ output in the short run,thereby its effect on stock prices is ________. A)raises;lowers;positive B)raises;raises;ambiguous C)lowers;raises;negative D)lowers;raises;positive
Q3) A permanent negative supply shock causes stock prices to ________ than they would if the supply shock were temporary. A)fall more B)fall less C)rise more
D)rise less
To view all questions and flashcards with answers, click on the resource link above.
Page 24
Chapter 23: Monetary Policy Theory
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/29406
Sample Questions
Q1) When the economy is hit by a temporary negative supply shock and the central bank does not respond by changing the autonomous component of monetary policy,then in the long run
A)inflation will be lower.
B)output will be at its potential.
C)output will be lower.
D)inflation will be unchanged.
E)both B and D.
Q2) Activists of the policies believe that
A)the self-correcting mechanism through wage and price adjustment is very slow.
B)wages and prices are sticky.
C)the government needs to pursue active policy to eliminate high unemployment when it develops.
D)all of the above.
Q3) Liquidity provision and asset purchase may not be enough to stimulate the economy unless the these policy actions are able to
A)lower the real interest rate for investments.
B)lower the short-term real interest rate.
C)raise the policy rate above zero.
D)lower the policy rate.
To view all questions and flashcards with answers, click on the resource link above. Page 25
Chapter 24: The Role of Expectations in Monetary Policy
Available Study Resources on Quizplus for this Chatper
31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/29407
Sample Questions
Q1) The argument that econometric policy evaluation is likely to be misleading if policymakers assume stable economic relationships is known as
A)the monetarist revolution.
B)the Lucas critique.
C)public choice theory.
D)new Keynesian theory.
Q2) Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. But if the commitment is not credible,then
A)the public's expected inflation will remain unchanged.
B)the short-run aggregate supply curve will rise.
C)over time inflation will fall back down to the inflation target.
D)all of the above.
E)both A and B.
Q3) The interest rate thought to have the most important impact on aggregate demand is the
A)short-term interest rate.
B)T-bill rate.
C)rate on 90-day CDs.
D)long-term interest rate.
To view all questions and flashcards with answers, click on the resource link above.
26
Chapter 25: Transmission Mechanisms of Monetary Policy
Available Study Resources on Quizplus for this Chatper
62 Verified Questions
62 Flashcards
Source URL: https://quizplus.com/quiz/29408
Sample Questions
Q1) During the Great Depression,real interest rates
A)rose to unprecedentedly high levels.
B)rose only slightly above the long-run trend.
C)fell to unprecedentedly low levels.
D)fell only slightly below the long-run trend.
Q2) On the evening news you hear of a scientific study that directly links premature births to cigarette smoking. This is an example of
A)direct-model evidence.
B)informed voter-model evidence.
C)structural-model evidence.
D)reduced-form evidence.
Q3) According to the traditional interest-rate channel,expansionary monetary policy lowers the real interest rate,thereby raising expenditure on
A)business fixed investment.
B)government expenditure.
C)consumer nondurables.
D)net exports.
Q4) Discuss three channels by which monetary policy affects stock prices and aggregate spending.
To view all questions and flashcards with answers, click on the resource link above. Page 27
Chapter 26: Financial Crises in Emerging Market Economies
Available Study Resources on Quizplus for this Chatper
21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/29409
Sample Questions
Q1) In emerging market countries,the deterioration in bank's balance sheets has more ________ effects on lending and economic activity than in advanced countries.
A)negative
B)positive
C)affirming D)advancing
Q2) The chaebols encouraged the Korean government to open up Korean financial markets to foreign capital. The Korean government responded by A)allowing unlimited short-term foreign borrowing but maintained quantity restrictions on long-term foreign borrowing by financial institutions.
B)allowing unlimited short-term and long-term foreign borrowing by financial institutions.
C)maintaining quantity restrictions on short-term foreign borrowing but allowing unlimited long-term foreign borrowing by financial institutions.
D)not allowing any foreign borrowing by financial institutions.
Q3) What two key factors trigger speculative attacks leading to currency cries in emerging market countries?
To view all questions and flashcards with answers, click on the resource link above.
28
Chapter 27: The ISLM Model
Available Study Resources on Quizplus for this Chatper
99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/29410
Sample Questions
Q1) Crowding out will be more pronounced the closer to vertical is the A)IS curve.
B)LM curve.
C)consumption function.
D)aggregate demand function.
Q2) In the basic closed-economy ISLM model,the money market can be described by the
A)money demand function.
B)money supply.
C)money market equilibrium condition.
D)all of the above.
Q3) An increase in the money supply,other things equal,shifts the ________ curve to the ________.
A)IS;right
B)IS;left
C)LM;left
D)LM;right
Q4) Using the long-run ISLM model,explain and demonstrate graphically the neutrality of money,for the case of an increase in the money supply.
To view all questions and flashcards with answers, click on the resource link above. Page 29