FIN 364 FIN364 Midterm 1 Answers

1. (TCO 1) Credit unions are _____ institutions. (Points : 4)

2. Question 2.2. (TCO 1) The household sector is the largest surplus sector and invests in the capital market ______. (Points : 4)

3. Question 3.3. (TCO 1) Money markets are associated with _______ ; capital markets are associated with ______. (Points : 4)

4. Question 4.4. (TCO 1) Secondary capital markets have promoted economic growth in the United States because (Points : 4)

5. Question 5.5. (TCO 1) Which of the following is not a debt security? (Points : 4)

6. Question 6.6. (TCO 1) A conditional contract granting its holder the right to buy assets in the future is a ______. (Points : 4)

7. Question 7.7. (TCO 1) The ease with which a financial claim can be resold is its ______. (Points : 4)

8. 8. (TCO 2) Who has a permanent vote on the FOMC? (Points : 4)

9. Question 9.9. (TCO 2) An increase in Federal Reserve float (Points : 4)

10. Question 10.10. (TCO 2) If the Fed wanted to increase the money supply immediately but just slightly, it would most likely ______. (Points : 4)

11. Question 11.11. (TCO 3) Unemployment should fall if ______. (Points : 4)

12. Question 12.12. (TCO 3) Monetary policies directed toward increased economic growth may have what impact upon the value of the dollar in relation to other currencies? (Points : 4)

13. Question 13.13. (TCO 3) The "tools" of monetary policy, whether "viable" or not, include all the following except ______. (Points : 4)

14. Question 14.14. (TCO 3) Monetarists and Keynesians agree that ______. (Points : 4)

15. Question 15.15. (TCO 2, 3) Which of the following was not a responsibility of the early Federal Reserve? (Points : 4)

16. Question 16.16. (TCO 4) Which of the following statements about interest rates is incorrect? (Points : 4)

17. Question 17.17. (TCO 4) Interest rates should increase if (Points : 4)

18. Question 18.18. (TCO 4) Interest rates move ______ with expected inflation and _____ with economic activity. (Points : 4)

19. Question 19.19. (TCO 4) If nominal interest rates are 10% and expected inflation is 5%, ______. (Points : 4)

20. Question 20.20. (TCO 4) With the real rate at 5%, most loans were made at 10% last year. This year, interest rates have declined to 8%. What was the expected inflation rate last year?(Points : 4)