QUESTIONS 1-The majority of the world\'s central banks have the goal of ________

Question

QUESTIONS

1-The majority of the world's central banks have the goal of ______________

a-monetary aggregates.

b-nominal interest rates.

c-Exchange rates.

2-In the task of monetary policy, the problem of asymmetric information arises when______________

a-the public has more information about the central bank's goals than its monetary policy actions.

b-Central bank executives have better information about their goals and intentions than the general public.

c-Central bank executives can not solve the problem of extracting information on their own.

3-Which of the following is a money market instrument?

a-A loan of federal funds.

b-A corporate bonus

c-A mortgage loan

4*The interest rate charged by the Federal Reserve to deposit institutions for the loans it confers is ____________

a-the federal funds rate.

b-the discount rate.

c-the PRIME rate.

5-The short-term aggregate supply curve _____________

a-It has a positive slope.

b-It has a negative slope.

c-It is horizontal.

6-Today 1 euro can be purchased at $ 1.10. This is the

a-Spot exchange rate.

b-forward exchange rate.

c-fixed exchange rate.

7-When the Mexican peso exchange rate changes from 9 pesos to the US dollar to 10 pesos to the US dollar, then the Mexican peso has been ________ and the US dollar has been ________.

a-appreciated; appreciated

b-depreciated appreciated

c-depreciated depreciated

8-On October 5, a US dollar was exchanged in the exchange market for around 0.61 euros. Therefore, one euro bought around ________ US dollars.

a-0.64

b-1.64

c1.20

9-An increase in the domestic interest rate makes the demand for domestic assets ________ and that the domestic currency be ________, if everything else remains constant.

a-rise; appreciate

b-rise; depreciate

c-diminish; appreciate

10-Under a regime of fixed exchange rate, if the national currency is initially ________, that is, ________ of its exchange rate parity, the central bank must intervene selling national currency buying international assets.

a-overvalued; under

b-undervalued; under

c-undervalued; above

11- Which of the following is generally considered the best monetary indicator?

a-The discount rate.

b-The monetary base.

c-The own reserves.

12- At first glance, a simple solution to fight against inflation is

a-reduce the rate of growth of the money supply.

b-limit the number of periods that politicians can remain in office.

c-return to the barter system and prohibit the use of legal tender money.

13- The most inflationary countries probably have

a-the highest rates of monetary growth.

b-low budget deficits as a percentage of GDP.

c-the lowest interest rates.

14-According to the analysis of aggregate demand and supply, in the short term an increase in public expenditure will cause the aggregate demand ________, which will make the product ________, if everything else remains the same.

a-rise; decrease

b-rise; upload

c-fall; decrease

15-According to the Fisher equation, if the nominal interest rate is 6 percent and the anticipated inflation rate is 1 percent, then the real interest rate is equal to __________

A* - 3 percent.

B*4 percent.

C*5 percent.

16-One way to derive the aggregate demand curve is to consider its four components, which are:

a-consumer spending, planned investment spending, government spending and net exports.

b-consumer spending, current investment spending, government spending and net exports.

c-consumer spending, planned investment spending, government spending and taxes.

17-If the aggregate product is below the level of the natural rate, proponents of activist policies would recommend that the government

a-do not do anything

b-try to eliminate high unemployment by trying to move the aggregate demand curve to the right.

c-try to eliminate high unemployment by trying to move the aggregate demand curve to the left.

Explanation / Answer

1. Nominal interest rate , because they used interest rate to target inflation.

2. b, because asymmetric information means people didn't have same information set . People and executive didn't have same information .

3. Mortgage loans , because mortgage loans are given after taking something under security .

4. Discount rate, discount rate is rate at which federal bank gives loans to other banks to lend.

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