货币银行学 章节题库 ch5

ECON320Chapter5PracticeTestProfessorC.JamesHueng1)Trueorfalse?Whentheinflationrateisexpectedtoincrease,therealcostofborrowingrisesatanygiveninterestrate;thesupplyofbondsincreasesandthesupplycurveshiftstotheright.A)TrueB)FalseFigure5-52)Trueorfalse?Figure5-5illustratestheeffectofanincreasedrateofmoneysupplygrowth.Fromthefigure,onecanconcludethattheliquidityeffectisnotpresentbecausetheinterestrateneverdrops.A)True.B)False.3)TrueorFalse?Whenthegrowthrateofthemoneysupplyincreases,interestratesendupbeingpermanentlyhigheriftheexpectedinflationeffectislargerthantheliquidityeffect.A)True.B)False.4)IftheexpectreturnonLMstockincreasesfrom3to6percent,andthereturnonOPstockincreasesfrom6to12percent,theexpectedreturnofholdingLMstock________relativetoOPstockandthedemandforLMstock_________.A)rises;fallsB)falls;fallsC)rises;risesD)falls;rises5)IftheexpectedreturnonABCstockisunchangedandtheexpectedreturnonCBSstockfallsfrom10to5percent,thentheexpectedreturnofholdingCBSstock_____relativetoABCstockandthedemandforABCstock_____.A)rises;risesB)rises;fallsC)falls;risesD)falls;falls6)IftheexpectedreturnonU.S.Treasurybondsrisesfrom5to10percentandtheexpectedreturnonGEstockrisesfrom7to8percent,thentheexpectedreturnofholdingGEstock_____relativetoU.S.TreasurybondsandthedemandforGEstock_____.A)rises;risesB)rises;fallsC)falls;risesD)falls;falls7)Ifhousingpricesaresuddenlyexpectedtoshootup,then,otherthingsequal,thedemandforhouseswill_____andthatofTreasurybillswill_____.A)increase;increaseB)increase;decreaseC)decrease;decreaseD)decrease;increase8)Whenpeoplebegintoexpectalargestockmarketdecline,thedemandcurveforbondsshiftstothe_____andtheinterestrate_____.A)left;fallsB)right;risesC)left;risesD)right;falls9)Whenpeoplebegintoexpectarunupinlargestockmarket,thedemandcurveforbondsshiftstothe_____andtheinterestrate_____.A)right;fallsB)left;fallsC)right;risesD)left;rises10)IftheexpectedreturnonU.S.Treasurybondsfallsfrom8to7percentandtheexpectedreturnoncorporatebondsfallsfrom10to8percent,thentheexpectedreturnofcorporatebonds______relativetoU.S.Treasurybondsandthedemandforcorporatebonds_____.A)falls;risesB)falls;fallsC)rises;risesD)rises;falls11)Holdingtheexpectedreturnonbondsconstant,adecreaseintheexpectedreturnonstockswould_____thedemandforbonds,shiftingthedemandcurvetothe_____.A)decrease;rightB)increase;leftC)increase;rightD)decrease;left12)Asthepriceofabond_____andtheexpectedreturn_____,bondsbecomemoreattractivetoinvestorsandthequantitydemandedrises.A)falls;fallsB)rises;risesC)falls;risesD)rises;falls13)Thereductionofbrokeragecommissionsfortradingcommonstocksthatoccurredin1975causedthedemandforbondsto_____andthedemandcurvetoshifttothe_____.A)fall,leftB)rise;rightC)rise;leftD)fall;right14)Ifthepriceofgoldbecomeslessvolatile,then,otherthingsequal,thedemandforstockswill_____andthedemandforantiqueswill_____.A)increase;increaseB)increase;decreaseC)decrease;decreaseD)decrease;increase15)Iffluctuationsininterestratesbecomegreater,then,otherthingsequal,thedemandforcommonstocks_____andthatoflong-termbonds_____.A)increases;increasesB)increases;decreasesC)decreases;decreasesD)decreases;increases16)Ifthepriceofrealestatebecomeslessvolatile,then,otherthingsequal,thedemandforstockswill_____andthatofantiqueswill_____.A)increase;increaseB)increase;decreaseC)decrease;decreaseD)decrease;increase17)Whenstockpricesbecomemorevolatile,thedemandcurveforbondsshiftstothe_____andtheinterestrate_____.A)right;risesB)left;risesC)left;fallsD)right;falls18)Allelsethesame,anincreaseinthevolatilityofthestockmarketcausesthedemandforbondsto_____andthedemandcurvetoshifttothe_____.A)fall;rightB)fall;leftC)rise;leftD)rise;right19)Whenbondinterestratesbecomelessvolatile,thedemandforbonds_____andtheinterestrate_____.A)decreases;risesB)increases;fallsC)decreases;fallsD)increases;rises20)Anincreaseintheriskinessofbondsrelativetoalternativeassetscausesthedemandforbondsto_____andthedemandcurvetoshifttothe_____.A)fall;rightB)rise;leftC)rise;rightD)fall;left21)Anincreaseintheriskinessofalternativeassetsrelativetobondscausesthedemandforbondsto_____andthedemandcurvetoshifttothe_____.A)fall;leftB)fall;rightC)rise;rightD)rise;left22)Whenbondsbecomemorewidelytraded,andasaconsequencethemarketbecomesmoreliquid,thedemandcurveforbondsshiftstothe_____andtheinterestrate_____.A)left;fallsB)right;risesC)left;risesD)right;falls23)Anincreaseintheliquidityofbondsresultsina_____indemandforbondsandthedemandcurveshiftstothe_____.A)rise;leftB)fall;rightC)rise;rightD)fall;left24)Anincreaseintheexpectedrateofinflationwill_____theexpectedreturnonbondsrelativetothethatonrealassets,andshiftthe_____curvetotheleft.A)raise;demandB)reduce;supplyC)raise;supplyD)reduce;demand25)FactorsthatincreasethedemandforbondsincludeA)andecreaseintheliquidityofcommonstocks.B)anincreaseintheinflationrate.C)adecreaseinthevolatilityofstockprices.D)alloftheabove.26)FactorsthatincreasethedemandforbondsincludeA)adecreaseintheinflationrate.B)anincreaseinthevolatilityofstockprices.C)anincreaseintheliquidityofstocks.D)alloftheabove.E)onlyAandBoftheabove.27)FactorsthatincreasethedemandforbondsincludeA)anincreaseintheinflationrate.B)anincreaseintheexpectedreturnsonstocks.C)anincreaseinthevolatilityofstockprices.D)onlyBandCoftheabove.28)FactorsthatdecreasethedemandforbondsincludeA)adecreaseintheexpectedreturnsonstocks.B)anincreaseinthevolatilityofstockprices.C)adecreaseintheinflationrate.D)adecreaseintheriskinessofstocks.29)FactorsthatdecreasethedemandforbondsincludeA)anincreaseintheliquidityofstocks.B)anincreaseintheinflationrate.C)adecreaseinthevolatilityofstockprices.D)alloftheabove.E)noneoftheabove.30)FactorsthatdecreasethedemandforbondsincludeA)adecreaseintheinflationrate.B)anincreaseintheliquidityofstocks.C)anincreaseinthevolatilityofstockprices.D)alloftheabove.E)onlyAandBoftheabove.31)YouwouldbelesswillingtopurchaseU.S.Treasurybonds,otherthingsequal,ifA)youexpectinterestratestofall.B)youinherit$1millionfromyourUncleHarry.C)goldbecomesmoreliquid.D)anyoftheaboveoccurs.32)YouwouldbelesswillingtobuyAT&Tbonds(holdingeverythingelseconstant)ifA)youexpectedjewelrytoappreciatesharplyinvalue.B)thebrokeragecommissionsonbondsalesrise.C)interestratesareexpectedtorise.D)anyoftheaboveoccurs.E)eitherAorCoftheaboveoccurs.33)Inarecessionwhenincomeandwealtharefalling,thedemandforbonds_____andthedemandcurveshiftstothe_____.A)rises;leftB)falls;rightC)rises;rightD)falls;left34)Inanexpandingeconomywithgrowingwealth,thedemandforbonds_____andthedemandcurveforbondsshiftstothe_____.A)rises;rightB)rises;leftC)falls;rightD)falls;left35)FactorsthatcancausethesupplycurveforbondstoshifttotherightincludeA)anincreaseinexpectedinflation.B)anincreaseingovernmentdeficits.C)anexpansioninoveralleconomicactivity.D)alloftheabove.E)onlyAandBoftheabove.36)FactorsthatcancausethesupplycurveforbondstoshifttotherightincludeA)adecreaseingovernmentdeficits.B)anexpansioninoveralleconomicactivity.C)adecreaseinexpectedinflation.D)alloftheabove.E)onlyAandBoftheabove.37)FactorsthatcancausethesupplycurveforbondstoshifttotheleftincludeA)adecreaseinexpectedinflation.B)anexpansioninoveralleconomicactivity.C)anincreaseingovernmentdeficits.D)onlyAandCoftheabove.38)Duringaneconomicexpansion,thesupplyofbonds_____andthesupplycurveshiftstothe_____.A)increases;leftB)increases;rightC)decreases;leftD)decreases;right39)Duringarecession,thesupplyofbonds_____andthesupplycurveshiftstothe_____.A)increases;leftB)increases;rightC)decreases;leftD)decreases;right40)Anincreaseinexpectedinflationcausesthesupplyofbondsto_____andthesupplycurvetoshifttothe_____.A)increase;leftB)increase;rightC)decrease;leftD)decrease;right41)Highergovernmentdeficits_____thesupplyofbondsandshiftthesupplycurvetothe_____.A)increase;leftB)increase;rightC)decrease;leftD)decrease;right42)Whentheinflationrateisexpectedtoincrease,theexpectedreturnonbondsrelativetorealassetsfallsforanygiveninterestrate;thedemandforbonds_____andthedemandcurveshiftstothe_____.A)rises;leftB)rises;rightC)falls;rightD)falls;left43)Whentheinflationrateisexpectedtoincrease,therealcostofborrowingdeclinesatanygiveninterestrate;thesupplyofbonds_____andthesupplycurveshiftstothe_____.A)decreases;rightB)increases;leftC)decreases;leftD)increases;right44)Whentheinflationrateisexpectedtoincrease,theexpectedreturnonbondsrelativetorealassetsfallsforanygiveninterestrate;the_____forbondsfallsandthe_____curveshiftstotheleft.A)supply;demandB)demand;supplyC)supply;supplyD)demand;demand45)Whentheinflationrateisexpectedtoincrease,therealcostofborrowingdeclinesatanygiveninterestrate;the_____ofbondsincreasesandthe_____curveshiftstotheright.A)supply;demandB)supply;supplyC)demand;supplyD)demand;demand46)Whentheinflationrateisexpectedtoincrease,the_____forbondsfalls,whilethe_____curveshiftstotheright.A)supply;demandB)supply;supplyC)demand;demandD)demand;supply47)Adecreaseinexpectedinflationshiftsthedemandforbondstothe________,thesupplyofbondstothe________,andtheinterestrate_______.A)Left;right;risesB)left;left;fallsC)right;left;risesD)right;left;fallsE)right;right;rises48)Whentheinflationrateisexpectedtorise,interestrateswill____;thisresulthasbeentermedthe_____.A)rise;FishereffectB)fall;KeyneseffectC)fall;FishereffectD)rise;PigoueffectE)rise;Keyneseffect49)Duringabusinesscycleexpansion,thesupplyofbondsshiftstothe_____asbusinessesperceivemoreprofitableinvestmentopportunities,whilethedemandforbondsshiftstothe_____asaresultoftheincreaseinwealthgeneratedbytheeconomicexpansion.A)left;rightB)right;leftC)left;leftD)right;right50)Duringabusinesscyclecontraction,thesupplyofbondsshiftstothe_____asbusinessesperceivefewerprofitableinvestmentopportunities,whilethedemandforbondsshiftstothe_____asaresultofthedecreaseinwealth.A)left;leftB)right;leftC)left;rightD)right;right51)Whentheinterestrateonabondisabovetheequilibriuminterestrate,inthebondmarketthereisexcess_____andtheinterestratewill_____.A)demand;fallB)supply;riseC)supply;fallD)demand;rise52)Whentheinterestrateonabondisbelowtheequilibriuminterestrate,inthebondmarketthereisexcess_____andtheinterestratewill_____.A)demand;riseB)demand;fallC)supply;riseD)supply;fall53)Whentheinterestratechanges,A)thedemandcurveforbondsshiftstotheleft.B)thesupplycurveforbondsshiftstotheleft.C)thesupplycurveforbondsshiftstotheright.D)thedemandcurveforbondsshiftstotheright.E)noneoftheaboveoccurs.54)Whenpeoplereviseupwardtheirexpectationsoffutureinterestrates,the_____curveforbondsshiftstothe_____.A)demand;rightB)demand;leftC)supply;leftD)supply;right55)Whenpeopleexpectinterestratestofallinthefuture,the_____curveforbondsshiftstothe_____.A)demand;rightB)demand;leftC)supply;leftD)supply;right56)Whenthefederalgovernment'sbudgetdeficitincreases,the_____curveforbondsshiftstothe_____.A)demand;leftB)supply;rightC)supply;leftD)demand;rightFigure5-157)InFigure5-1,themostlikelycauseoftheincreaseintheequilibriuminterestratefromi1toi2isA)asharpdeclineinthegrowthrateofthemoneysupply.B)anincreaseintheexpectedinflationrate.C)adecreaseintheexpectedinflationrate.D)acombinationofbothAandCabove.58)InFigure5-1,anincreaseintheexpectedinflationratecausestheA)interestratetoincreasefromi1toi2.B)interestratetodecreasefromi2toi1.C)demandcurveforbondstoshifttotheleft.D)bothAandCoftheabove.E)bothBandCoftheabove.59)InFigure5-1,onefactorthatwouldnothavecausedthesupplyofbondstoincrease(shifttotheright)isA)abusinesscycleexpansion.B)expectationsofmoreprofitableinvestmentopportunities.C)adecreaseingovernmentbudgetdeficits.D)anincreaseinexpectedinflation.60)InFigure5-1,onefactorthatwouldnothavecausedthedemandforbondstodecrease(shifttotheleft)isA)anincreaseintheexpectedreturnonbondsrelativetootherassets.B)adecreaseinwealth.C)anincreaseintheriskinessofbondsrelativetootherassets.D)adecreaseintheexpectedreturnonbondsrelativetootherassets.61)InFigure5-1,factorsthatwouldnothavecausedthedemandforbondstodecrease(shifttotheleft)include:A)anincreaseintheexpectedreturnonbondsrelativetootherassets.B)areductionintheriskinessofbondsrelativetootherassets.C)adecreaseinwealth.D)alloftheabove.E)onlyAandBoftheabove.62)InFigure5-1,factorsthatcouldcausethesupplyofbondstoincrease(shifttotheright)include:A)expectationsofmoreprofitableinvestmentopportunities.B)anincreaseinexpectedinflation.C)anincreaseingovernmentbudgetdeficits.D)alloftheabove.E)onlyBandCoftheabove.63)InFigure5-1,factorsthatcouldcausethedemandforbondstodecrease(shifttotheleft)include:A)adecreaseintheexpectedrateofinflation.B)expectationsofhigherinterestratesinthefuture.C)adecreaseintheriskinessofbondsrelativetootherassets.D)alloftheabove.E)onlyAandBoftheabove.64)InFigure5-1,thepriceofbondswouldfallfromP1toP2andtheinterestratewouldrisefromi1toi2ifA)theriskinessofbondsfallsrelativetootherassets.B)interestratesareexpectedtofallinthefuture.C)theexpectedreturnonbondsrelativetootherassetsisexpectedtoincreaseinthefuture.D)inflationisexpectedtoincreaseinthefuture.Figure5-265)InFigure5-2,onepossibleexplanationfortheincreaseintheinterestratefromi1toi2isA)anincreaseineconomicgrowth.B)anincreaseintheexpectedinflationrate.C)adecreaseineconomicgrowth.D)adecreaseintheexpectedinflationrate.66)InFigure5-2,onefactorthatwouldnothavecausedthesupplyofbondstoshifttotherightisA)anincreaseingovernmentbudgetdeficits.B)abusinesscycleexpansion.C)arecession.D)anincreaseinexpectedinflation.67)InFigure5-2,onefactorthatwouldnothavecausedthedemandforbondstoincrease(shifttotheright)isA)anincreaseinwealth.B)adecreaseintheexpectedreturnonbondsrelativetootherassets.C)areductionintheriskinessofbondsrelativetootherassets.D)anincreaseintheexpectedreturnonbondsrelativetootherassets.68)InFigure5-2,factorsthatcouldcausethesupplyofbondstoincrease(shifttotheright)include:A)adecreaseinexpectedinflation.B)adecreaseingovernmentbudgetdeficits.C)expectationsofmoreprofitableinvestmentopportunities.D)alloftheabove.E)onlyBandCoftheabove.69)InFigure5-2,factorsthatcouldcausethedemandforbondstoincreaseinclude:A)anincreaseintheexpectedreturnonbondsrelativetootherassets.B)adecreaseintheexpectedreturnonbondsrelativetootherassets.C)areductionintheriskinessofbondsrelativetootherassets.D)bothAandBoftheabove.E)bothAandCoftheabove.70)InFigure5-2,factorsthatcouldcausethedemandforbondstoshifttotherightinclude:A)expectationsoflowerinterestratesinthefuture.B)anincreaseintheexpectedrateofinflation.C)anincreaseintheriskinessofbondsrelativetootherassets.D)alloftheabove.71)IntheKeynesianliquiditypreferenceframework,ariseinthepricelevelcausesthedemandformoneyto_____andthedemandcurvetoshifttothe_____.A)increase;rightB)increase;leftC)decrease;rightD)decrease;left72)WhentheFed____themoneystock,themoneysupplycurveshiftstothe____andtheinterestrate____A)increases;left;risesB)increases;right;risesC)decreases;left;fallsD)decreases;left;risesE)decreases;right;rises73)Whenthepricelevelfalls,the________curvefornominalmoney________,andinterestrates_______.A)demand;decreases;fallsB)supply;decreases;fallsC)demand;increases;risesD)supply;increases;fallsE)supply;increases;rises74)A(n)______inthemoneysupplycreatesexcess______of(for)money,causinginterestratesto______.A)decrease;demand;fallB)increase;demand;riseC)increase;supply;fallD)increase;supply;riseE)decrease;supply;fallFigure5-375)InFigure5-3,theincreaseintheinterestratefromi2toi1canbeexplainedbyA)anincreaseinincome.B)adeclineintheexpectedpricelevel.C)adecreaseinmoneygrowth.D)alloftheabove.E)onlyAandBoftheabove.76)InFigure5-3,thedeclineintheinterestratefromi1toi2canbeexplainedbyA)adecreaseinincome.B)adecreaseintheexpectedpricelevel.C)anincreaseinmoneygrowth.D)bothAandBoftheabove.E)bothAandCoftheabove.Figure5-477)InFigure5-4,thefactorresponsibleforthedeclineintheinterestrateisA)anincreaseinthemoneysupply.B)adeclineinincome.C)adeclineintheexpectedinflationrate.D)adeclinethepricelevel.78)Whenthegrowthrateofthemoneysupplyisdecreased,interestrateswillfallimmediatelyiftheliquidityeffectis_____thantheothermoneysupplyeffectsandthereis_____adjustmentofexpectedinflation.A)larger;fastB)larger;slowC)smaller;slowD)smaller;fast79)Whenthegrowthrateofthemoneysupplyisincreased,interestrateswillfallimmediatelyiftheliquidityeffectis_____thantheothermoneysupplyeffectsandthereis_____adjustmentofexpectedinflation.A)larger;fastB)larger;slowC)smaller;slowD)smaller;fast80)Whenthegrowthrateofthemoneysupplyisdecreased,interestrateswillriseimmediatelyiftheliquidityeffectis_____thantheothermoneysupplyeffectsandthereis_____adjustmentofexpectedinflation.A)larger;fastB)larger;slowC)smaller;slowD)smaller;fast81)Whenthegrowthrateofthemoneysupplyisincreased,interestrateswillriseimmediatelyiftheliquidityeffectis_____thantheothermoneysupplyeffectsandthereis_____adjustmentofexpectedinflation.A)larger;fastB)larger;slowC)smaller;slowD)smaller;fastFigure5-582)Figure5-5illustratestheeffectofanincreasedrateofmoneysupplygrowth.Fromthefigure,onecanconcludethattheA)liquidityeffectissmallerthantheexpectedinflationeffectandinterestratesadjustslowlytochangesinexpectedinflation.B)liquidityeffectislargerthantheexpectedinflationeffectandinterestratesadjustquicklytochangesinexpectedinflation.C)liquidityeffectislargerthantheexpectedinflationeffectandinterestratesadjustslowlytochangesinexpectedinflation.D)liquidityeffectissmallerthantheexpectedinflationeffectandinterestratesadjustquicklytochangesinexpectedinflation.83)Figure5-5illustratestheeffectofanincreasedrateofmoneysupplygrowth.Fromthefigure,onecanconcludethattheA)Fishereffectissmallerthantheexpectedinflationeffectandinterestratesadjustquicklytochangesinexpectedinflation.B)Fishereffectisdominatedbytheliquidityeffectandinterestratesadjustslowlytochangesinexpectedinflation.C)liquidityeffectisdominatedbytheFishereffectandinterestratesadjustquicklytochangesinexpectedinflation.D)liquidityeffectisdominatedbytheFishereffectandinterestratesadjustslowlytochangesinexpectedinflation.Figure5-684)Figure5-6illustratestheeffectofanincreasedrateofmoneysupplygrowth.Fromthefigure,onecanconcludethattheA)liquidityeffectissmallerthantheexpectedinflationeffectandinterestratesadjustquicklytochangesinexpectedinflation.B)liquidityeffectislargerthantheexpectedinflationeffectandinterestratesadjustquicklytochangesinexpectedinflation.C)liquidityeffectissmallerthantheexpectedinflationeffectandinterestratesadjustslowlytochangesinexpectedinflation.D)liquidityeffectislargerthantheexpectedinflationeffectandinterestratesadjustslowlytochangesinexpectedinflation.85)Figure5-6illustratestheeffectofanincreasedrateofmoneysupplygrowth.Fromthefigure,onecanconcludethattheA)Fishereffectisdominatedbytheliquidityeffectandinterestratesadjustslowlytochangesinexpectedinflation.B)Fishereffectissmallerthantheexpectedinflationeffectandinterestratesadjustquicklytochangesinexpectedinflation.C)liquidityeffectisdominatedbytheFishereffectandinterestratesadjustslowlytochangesinexpectedinflation.D)liquidityeffectisdominatedbytheFishereffectandinterestratesadjustquicklytochangesinexpectedinflation.Figure5-786)Figure5-7illustratestheeffectofanincreasedrateofmoneysupplygrowth.Fromthefigure,onecanconcludethattheA)liquidityeffectissmallerthantheexpectedinflationeffectandinterestratesadjustslowlytochangesinexpectedinflation.B)liquidityeffectislargerthantheexpectedinflationeffectandinterestratesadjustquicklytochangesinexpectedinflation.C)liquidityeffectislargerthantheexpectedinflationeffectandinterestratesadjustslowlytochangesinexpectedinflation.D)liquidityeffectissmallerthantheexpectedinflationeffectandinterestratesadjustquicklytochangesinexpectedinflation.AnswerKeyTestname:CH51)B2)B3)A4)B5)C6)D7)B8)D9)D10)B11)C12)C13)A14)C15)B16)C17)D18)D19)B20)D21)C22)D23)C24)D25)A26)E27)C28)D29)D30)B31)C32)D33)D34)A35)D36)B37)A38)B39)C40)B41)B42)D43)D44)D45)B46)D47)D48)A49)D50)A51)AAnswerKeyTestname:CH552)C53)E54)B55)A56)B57)B58)D59)C60)A61)E62)D63)B64)D65)A66)C67)B68)C69)E70)A71)A72)D73)A74)C75)A76)A77)A78)D79)B80)B81)D82)D83)C84)D85)A86)A