國立高雄第一科技大學管理學院暨財金學院 學年度第 2 學期經濟學期末會考題目卷 ( A )

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1 國立高雄第一科技大學管理學院暨財金學院 學年度第 2 學期經濟學期末會考題目卷 ( A ) Money and Monetary System 1. When conducting an open-market purchase, the Fed A. buys government bonds, and in so doing decreases the money supply. B. sells government bonds, and in so doing decreases the money supply. C. buys government bonds, and in so doing increases the money supply. D. sells government bonds, and in so doing increases the money supply. 2. When the Fed makes open-market sales, bank A. deposits increase and lending decreases. B. deposits and lending increase. C. withdrawals and lending increase. D. withdrawals increase and lending decreases. 3. If the public decides to hold more currency and fewer deposits in banks, bank reserves A. decrease and the money supply eventually decreases. B. decrease but the money supply does not change. C. increase and the money supply eventually increases. D. increase but the money supply does not change. 4. Refer to Table 1, Balance Sheet of Metropolis National Bank. Metropolis National Bank is currently holding 2% of deposits as excess reserves. Assuming that all banks have the same required reserve ratio, and then none want to hold excess reserves what is the value of the money multiplier? A. B. C. D Table 1 Metropolis National Bank is currently holding 2% of its deposits as excess reserves. Metropolis National Bank Assets Liabilities Reserves $60,000 Deposits $500,000 Loans $440, The federal funds rate is the A. percentage of face value that the Federal Reserve is willing to pay for Treasury Securities. B. percentage of deposits that banks must hold as reserves. C. interest rate at which the Federal Reserve makes short-term loans to banks. D. interest rate at which banks lend reserves to each other overnight. 6. The Fed can reduce the federal funds rate by A. decreasing the money supply. To decrease the money supply it could sell bonds. B. decreasing the money supply. To decrease the money supply it could buy bonds. C. increasing the money supply. To increase the money supply it could buy bonds. D. increasing the money supply. To increase the money supply it could sell bonds. 7. Refer to Figure 1. When the money supply curve shifts from MS1 to MS2, A. the demand for goods and services decreases. Figure 1 B. the economy's ability to produce goods and services increases. C. the equilibrium price level decreases. D. None of the above is correct. 1

2 8. Based on the quantity equation, if Y = 3,000, P = 4, and V = 3, then M = A. $4,000. B. $2,250. C. $250. D. $36, Given the following information, what are the values of M1 and M2? A. M1 = $830 billion, M2 = $4,370 billion. B. M1 = $980 billion, M2 = $4,370 billion. C. M1 = $980 billion, M2 = $3, 390 billion. D. M1 = $950 billion, M2 = $830 billion. Small time deposits Demand deposits and other checkable deposits Savings deposits Money market mutual funds Traveler's checks Large time deposits Currency Miscellaneous categories in M2 $1,100 billion $800 billion $1,350 billion $900 billion $30 billion $750 billion $150 billion $40 billion 10. Which of the following assets is most liquid? A. money B. bond C. savings account D. stock 11. Money's most narrow definition is based on its function as a A. store of value. B. unit of account. C. standard of deferred payment. D. medium of exchange. 12. An increase in the price level causes A. the money demand curve to shift to the left. B. the money demand curve to shift to the right. C. a movement up along the money demand curve. D. a movement down along the money demand curve. 13. An increase in the interest rate should the demand for dollars and the value of the dollar, and net exports should. A. decrease; decrease B. decrease; increase C. increase; decrease D. increase; increase 14. The situation in which short-term interest rates are pushed to zero, leaving the central bank unable to lower them further is known as A. the Taylor rule. B. a liquidity trap. C. a zero-sum game. D. an interest rate panic. 15. With a monetary growth rule as proposed by the monetarists, during a recession the rate of growth of the money supply would A. decrease. B. increase. C. not change. D. decrease or increase depending on economic conditions. 16. Most economists believe that the best monetary policy target is A. an interest rate. B. the money supply. C. total bank reserves. D. the discount rate. 17. The Taylor rule links the Federal Reserve's target for the A. money supply to shifts in money demand. B. money supply to changes in interest rates. C. federal funds rate to economic variables. D. federal funds rate to the money supply. 2

3 Open-Economy Macroeconomics: Foreign Exchange Markets 18. If the U.S. real exchange rate appreciates, U.S. net exports A. increase and U.S. net capital outflow decreases. B. decrease and U.S. net capital outflow increases. C. and U.S. net capital outflow both increase. D. and U.S. net capital outflow both decrease. 19. Which of the following does purchasing-power parity imply? A. The nominal exchange rate is the ratio of U.S. prices to foreign prices. B. The price of domestic goods relative to foreign goods cannot change. C. The purchasing power of the dollar is the same in the U.S. as in foreign countries. D. All of the above are correct. 20. A Chinese firm buys lumber from the United States and pays for it with yen. Other things the same, Chinese A. net exports decrease, and U.S. net capital outflow increases. B. net exports increase, and U.S. net capital outflow decreases. C. net exports increase, and U.S. net capital outflow increases. D. net exports decrease, and U.S. net capital outflow decreases. 21. When a country's central bank increase the money supply, its A. price level rises and its currency appreciates relative to other currencies in the world. B. price level falls and its currency appreciates relative to other currencies in the world. C. price level falls and its currency depreciates relative to other currencies in the world. D. price level rises and its currency depreciates relative to other currencies in the world. 22. If a country has a trade surplus A. it has positive net exports and negative net capital outflow. B. it has positive net exports and positive net capital outflow. C. it has negative net exports and positive net capital outflow. D. it has negative net exports and negative net capital outflow. 23. A country has $45 million of domestic investment and net capital outflow of -$60 million. What is saving? A. $15 million. B. -$15 million. C. $105 million. D. -$105 million. 24. If you were told that the exchange rate was 1.2 Canadian dollars per U.S. dollar, a watch that costs $12 US dollars would cost A. $8.5 Canadian dollars. B. $10 Canadian dollars. C. $12.20 Canadian dollars. D. $14.40 Canadian dollars. 25. Suppose the same basket of goods costs $120 in the U.S. and 60 pounds in Britain. According to purchasing power parity, what is the nominal exchange rate? A. 2 pounds per dollar B. 1/2 pound per dollar C. 1 pound per dollar D. None of the above is correct 26. A paperback book in the U.S. costs $6. In Chile it costs 4 pesos. If the nominal exchange rate is 1/2 peso per dollar, what is the real exchange rate? A. 3/4 B. 2/3 C. 4/3 D. 1/2 3

4 27. Sonya, a citizen of Denmark, produces boots and shoes that she sells to department stores in the United States. Other things the same, these sales A. decrease U.S. net exports and increase Danish net exports. B. decrease U.S. net exports and have no effect on Danish net exports. C. increase U.S. net exports and decrease Danish net exports. D. increase U.S. net exports and have no effect on Danish net exports. 28. Sue, a U.S. citizen, buys stock in an Italian automobile corporation. Her purchase counts as A. investment for Sue and U.S. foreign direct investment. B. investment for Sue and U.S. foreign portfolio investment. C. saving for Sue and U.S. foreign direct investment. D. saving for Sue and U.S. foreign portfolio investment. 29. Net capital outflow equals the difference between a country's A. purchases of foreign assets and sales of domestic assets abroad. B. investment and saving. C. buying of foreign goods and services and sales of goods and services abroad. D. income and expenditure. 30. A depreciation of the U.S. real exchange rate induces U.S. consumers to buy A. fewer domestic goods and fewer foreign goods. B. fewer domestic goods and more foreign goods. C. more domestic goods and fewer foreign goods. D. more domestic goods and more foreign goods 31. If purchasing-power parity holds, a dollar will buy A. more goods in foreign countries than in the United States. B. as many goods in foreign countries as it does in the United States. C. fewer goods in foreign countries than it does in the United States. D. None of the above is implied by purchasing-power parity. 32. If a country has negative net capital outflows, then its net exports are A. positive and its saving is larger than its domestic investment. B. positive and its saving is smaller than its domestic investment. C. negative and its saving is larger than its domestic investment. D. negative and its saving is smaller than its domestic investment. 33. According to purchasing-power parity, if prices in the United States increase by a larger percentage than prices in Poland, then A. the real exchange defined as Polish goods per unit of U.S. goods rises. B. the real exchange defined as Polish goods per unit of U.S. goods falls. C. the nominal exchange rate defined as Polish currency per dollar rises. D. the nominal exchange rate defined as Polish currency per dollar falls. 34. When a country's central bank increases the money supply, its A. price level rises and its currency appreciates relative to other currencies in the world. B. price level rises and its currency depreciates relative to other currencies in the world. C. price level falls and its currency appreciates relative to other currencies in the world. D. price level falls and its currency depreciates relative to other currencies in the world. 4

5 Answers 1 C 9 B 17 C 25 B 33 D 2 D 10 A 18 D 26 A 34 B 3 A 11 D 19 C 27 A 4 B 12 B 20 A 28 D 5 D 13 C 21 D 29 A 6 C 14 B 22 B 30 C 7 D 15 C 23 B 31 B 8 A 16 A 24 D 32 D 5