Money and Banking
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Money and Banking
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25 Questions

1. Typically, borrowers have supers information relative to lenders about the potential returns and risks associated with an investment project. The difference in information is called:

2. The price of a coupon bond and the yield to maturity are _____ related; that is, as the yield to maturity _____, the price of the bond ____.

3. ______ is a flow of earnings per unit of time.

4. The president from which Federal Reserve Bank always has a vote in the Federal Open Market Committee?

5. The Federal Reserve was created to:

6. Which of the following can be described as involving direct finance?

7. Financial markets promote economic efficiency by:

8. The monetary base consists of:

9. The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100 per year) is commonly referred to as the:

10. US 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.

11. Everything else held constant, when households save less, wealth and demand for bonds ____ and the demand curve shifts to the ____, everything else held constant.

12. High interest rates might _____ purchasing a house or car but the same time high interest rates might ______ saving.

13. Pure expectations theory

14. The principal lender-savers are:

15. In the simple deposit expansion model, if the banking system has excess reserves of $75 and the required reserve ratio is 20% the potential expansion of checkable deposits is:

16. Members of the Board of Governors are:

17. Both ___ and ___ are Federal Reserve assets:

18. US government bonds have no dealt risk because:

19. Channeling funds from individuals with surplus funds to those desiring funds when the saver does not purchase the borrower's security is known as:

20. In the simple deposit expansion model, if the Fed extends a $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase by

21. HIgher government edicts ____ the supply of bonds and shift the supply curve to the ____, everything else held constant.

22. According to the expectations theory of the term structure:

23. Effective lag

24. ____ is the relative ease and speed with which as asset can be converted into a medium of exchange.

25. All the money in circulation =

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