1)If the liquidity effect is larger than the other effects, an increa in money growth will
(a)lower interest rates.
(b)rai interest rates.
(c)cau interest rates to ri initially but then fall below the initial level.
(d)cau interest rates to fall initially but then ri above the initial level.
Answer: A
2)Deposit insurance
(a)attracts risk-prone entrepreneurs to the banking industry.
(b)encourages bank managers to take on greater risks than they otherwi would.
(c)reduces the incentives of depositors to monitor the riskiness of their banks’ ast portfolios.
(d)does all of the above.
Answer: D
3)The formula linking the money supply to the monetary ba is
(a)M ＝ m ＋ MB..
(b)M ＝ m × MB.
(c)m ＝ M × MB.
(d)MB ＝ M × m.
Answer: B
4) Using the one-period valuation model, assuming a year-end dividend of $0.50, an expected sales price of $50, and a required rate of return of 10%, the current price of the stock would be
(a)$50.50.
(b)$50.00.
(c)$45.91.
(d)$45.00.
Answer: C
5) The Fed us three policy tools to manipulate the money supply: open market operations, which affect the _____; changes in discount lending, which affect the _____ by influencing the quantity of discount loans; and changes in rerve requirements, which affect the _____.
(a)money multiplier; monetary ba; monetary ba
(b)monetary ba; money multiplier; monetary ba
(c)monetary ba; monetary ba; money multiplier
冬葱
(d)money multiplier; money multiplier; monetary ba
行李箱盖Answer: C
6） Disadvantages of using rerve requirements to control the money supply and interest rates include
a)their overly-powerful impact on the money supply.
b)creating potential lending problems for banks with high levels of excess rerves.
c)their overly-powerful impact on rerves and the monetary ba.
d)all of the above.
Answer: A
7) If the expected return on NBC stock ris from 5 to 10 percent and the expected return on CBS stock ris from 12 to 18 percent, then the expected return of holding CBS stock _____ relative to NBC stock and the demand for CBS stock _____.
a)ris; ris
b)ris; falls
c)falls; ris
d)falls; falls
Answer: A
8） When the default risk in corporate bonds increas, other things equal, the demand curve for corporate bonds shifts to the _____ and the demand curve for Treasury bonds shifts to the _____. 手术室护士职责
e)right; right
f)right; left
g)left; left
h)left; right
Answer: D
9）If the required rerve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess rerves total $0.8 billion, then the money supply is
a)$8000.
b)$1200.
c)$1200.8.
d)$8400.
Answer: B
10）A curity that pays $52.50 in one year and $110.25 in two years, with an interest rate of 5 percent, has a prent value of
a)$150.
b)$162.50.
c)$200.
d)$300.
Answer: A
1.Assume that no banks hold excess rerves, and the public holds no currency. If a bank lls a $100 curity to the Fed, show, using T-accounts, what happens to this bank and two additional steps in the deposit expansion process, assuming a 10% rerve requirement. How much do deposits and loans increa for the banking system when the process is completed?
Step 1 | | |
| Bank A | |
Asts | Liabilities | |
Securities | −$100 | | 茫然不解 |
| | |
民间风俗Rerves | +$100 | | |
| | |
| Step 2 | | |
| | Bank A | |
| 香辣烤鸡翅Asts | Liabilities | |
| Rerves | −$100 | | |
| | | |
| Loans | +$100 | | |
| | | |
| | | | | | |
Next, the proceeds are deposited in Bank B, and then Bank B lends it $90 of excess rerves.
Step 3 | | | | |
| | Bank B | | |
| Asts | Liabilities | |
Rerves | +$100 | | Deposits | +$100 | |
Step 4 | | | | |
| | Bank B | | |
| Asts | Liabilities | |
Rerves | −$90 | | | | |
| | | 银行是怎么赚钱的 | |
Loans | +$90 | | | | |
| | | | |
| | | | | |
Next, the loan proceeds are deposited in Bank C, which then lends its excess rerves Step 5
| | Bank C | |
| Asts | 大学班长职责Liabilities |
Rerves | +$90 | | Deposits | +$90 |
Step 6 | | | |
| | Bank C | |
| Asts | Liabilities |
| | | | |
Rerves -81
Loans +81
For the banking system, both loans and deposits increa by $1000.
2.If over the next five years, the interest rates on 1-year bonds are expected to be 5, 7, 7, 6, and 5 percent, and the liquidity premium for five-year bonds is 1 percent. According to the expectations theory of the term structure, what is the rate on five-year bonds? According to the liquidity premium theory, what is the rate on five-year bonds? Explain the difference between the two answers.
The expectations theory predicts that the five-year interest rate is the average of five 1-year interest rates, which is 6 percent in this problem. The liquidity premium theory adds a term premium due to a preference for short-term bonds to the expectations theory. In this problem, the liquidity premium theory predicts a rate of 7 percent.
