FIN 364 FIN364 Midterm with Answers (DeVry) – Online Homework Help
FIN 364 Midterm Answers / Money and Banking
- (TCO 1) Which of the following do not take deposits?
- (TCO 1) Currency transformation is an important service because
- (TCO 1) Which of the following is not a characteristic of money market instruments?
- (TCO 1) Primary capital markets are most likely to finance ______.
- (TCO 1) Money market securities have very little ______.
- (TCO 1) A dealer offers to buy shares of IBM at $116 and sell to investors at $118. The “bid” is ______.
- (TCO 1) Surplus spending units (SSU) are also called ______.
- (TCO 2) The 12 Federal Reserve Banks are ______.
- (TCO 2) Reforms and regulatory changes in U.S. financial institutions are best associated with ______.
- (TCO 2) If the Fed wanted to decrease the money supply immediately but just slightly, it would most likely ______.
- (TCO 3) Unemployment should fall if ______.
- (TCO 3) Monetarists believe that an increase in the money supply, all else equal, will cause ______.
- (TCO 3) Which of the following would most likely decrease the Federal Funds rate?
- (TCO 3) Monetarists and Keynesians agree that ______.
- (TCO 2, 3) The Federal Reserve System established ______.
- (TCO 4) An increase in the rate of expected inflation will
- (TCO 4) Interest rates should decrease if
- (TCO 4) Interest rates move ______ with expected inflation and _____ with economic activity.
- (TCO 4) If nominal interest rates are 10% and expected inflation is 5%, ______.
- (TCO 4) With the real rate at 4%, most loans were made at 13% last year. This year, interest rates have declined to 8%. What was the expected inflation rate last year?
- (TCO 1) List and briefly describe the main risks managed by financial intermediaries.
- (TCO 2) Why is changing the discount rate not a viable tool for conducting monetary policy?
- (TCO 3) What exactly is the Fed Funds Rate, and why isn’t it considered a tool of monetary policy?
- (TCO 4) Explain how price expectations influence the level of interest rates. What impact has inflation premiums had on interest rate levels in recent years?
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