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An open market operation

A foreign exchange intervention

Central bank’s extension of a discount loan

All of the given options

Question # 2 of 20 ( Start time: 11:10:05 PM ) Total Marks: 1

Which of the following are used to monitor and stabilize the economy?

Select correct option:

Stock exchanges

Commercial Banks

Central Banks

Financial institutions

Question # 3 of 20 ( Start time: 11:10:30 PM ) Total Marks: 1

High State Bank purchases some U.S. Treasury bonds. We would view such bonds as being free of:

Select correct option:

Credit risk

Interest rate risk

Reinvestment risk

All of the given options

Question # 4 of 20 ( Start time: 11:11:17 PM ) Total Marks: 1

Stock market bubbles can lead to:

Select correct option:

An inefficient allocation of resources

Stock market crashes

Patterns of volatile returns from the stock market

All of the given options

Question # 5 of 20 ( Start time: 11:11:59 PM ) Total Marks: 1

__________ are the economies Central nervous system.

Select correct option:

Financial Instruments

Financial Markets

Financial Institutions

Financial Companies

Question # 6 of 20 ( Start time: 11:12:50 PM ) Total Marks: 1

Which of the following would be considered characteristic of money?

Select correct option:

It is store of value

It pays a higher return than most assets

It is in fixed supply

It is legal tender everywhere in the world

Question # 7 of 20 ( Start time: 11:13:49 PM ) Total Marks: 1

The Fed lacks complete control over the money supply because it cannot perfectly predict:

Select correct option:

Discount borrowing by the banks

Shifts from deposits to currency

Excess reserves held by banks

Any of the above

Question # 8 of 20 ( Start time: 11:14:58 PM ) Total Marks: 1

When the Fed wants to increase the level of reserves in the banking system, it can:

Select correct option:

Buy bonds from the public

Buy bonds from banks

Increase discount loans to banks

All of the given options

Question # 9 of 20 ( Start time: 11:15:25 PM ) Total Marks: 1

If a bank has excess reserves of $15,000 and demand deposit liabilities of $80,000, and if the reserve requirement is 20%, then the bank has total reserves of:

Select correct option:

$11,000

$31,000

$26,000

$20,000

Question # 10 of 20 ( Start time: 11:16:33 PM ) Total Marks: 1

A bank can usually offer a saver a higher return for the same risk because:

Select correct option:

The bank can usually purchase assets at a higher cost than any one saver

The bank can pool the resources of larger savers and purchase lower denominated assets

Economies of scale can be applied by the bank in its purchase of assets

None of the given options

Question # 11 of 20 ( Start time: 11:17:31 PM ) Total Marks: 1

Which one the following is NOT the way to manage liquidity risk?

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By holding sufficient excess reserves

Through diversification

By adjusting assets

By adjusting liabilities

Question # 12 of 20 ( Start time: 11:18:16 PM ) Total Marks: 1

Currency-to-deposit ratio is a factor that affects the quantity of money. This factor is controlled by which of the following?

Select correct option:

Central bank

Bank regulators

Commercial banks

Non bank public

Question # 13 of 20 ( Start time: 11:18:53 PM ) Total Marks: 1

What will be the effect on the present value if we double the future value of the payment?

Select correct option:

It will decrease the value by one-half

It will increase the value by one-half

It will equally increase the value i.e. doubles the value

It will have no effect on the value

Question # 14 of 20 ( Start time: 11:19:56 PM ) Total Marks: 1

Which of the following financial instruments used primarily as store of value?

Select correct option:

Options

Stocks

Home mortgage

Bonds

Question # 15 of 20 ( Start time: 11:20:47 PM ) Total Marks: 1

Stock exchange is an example of:

Select correct option:

Financial company

Financial institution

Financial market

Bank

Question # 16 of 20 ( Start time: 11:21:12 PM ) Total Marks: 1

_____________ are organized to eliminate the need of costly information gathering.

Select correct option:

Central bank

Commercial banks

Stock exchanges

Insurance companies

Question # 17 of 20 ( Start time: 11:22:05 PM ) Total Marks: 1

The broad class of securities firms includes which of the following?

Select correct option:

Brokerages

Investment banks

Mutual fund companies

All of the given options

Question # 18 of 20 ( Start time: 11:22:54 PM ) Total Marks: 1

Which of the following is NOT the component of monetary base?

Select correct option:

Currency in the hands of the public

Reserves of the banking system

Deposits at the central bank

All of the given options

Question # 19 of 20 ( Start time: 11:23:54 PM ) Total Marks: 1

In the simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in checkable deposits equals the product of the change in reserves and the:

Select correct option:

Inverse of the excess reserve ratio

The simple money multiplier

Inverse of the simple money multiplier

Discount rate

Question # 20 of 20 ( Start time: 11:25:01 PM ) Total Marks: 1

Which of the following is NOT a depository institution?

Select correct option:

Commercial banks

Savings institutions

Credit unions

Brokerage house