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BNAD 301 FINAL EXAM questions with correct answers 2024/2025
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BNAD 301 FINAL EXAM questions with correct answers 2024/2025
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BNAD 301 FINAL EXAMSuppose that, at market interest rates, the net demand for borrowing is negative. As the market
adjusts to equilibrium, we expect the (mark all that apply): - ANSInterest rate to fall
In a recession, interest rates typically ______ if the Fed does not respond; the Fed's response
typically ______ that effect. - ANSFall, Magnifies
If the federal budget deficit decreases, then what happens (mark all that apply)? - ANS-Net
demand for borrowing decreases.
-Interest rates decrease.
-Corporate investment in factories and equipment increases.
If the market interest rate rises from 5% to 7%, then the net demand for borrowing: - ANSThere
is no clear shift.
(As in any supply and demand market, the price (here the interest rate) responds to the position
of the curve, not the other way around.)
If consumers spend less, to reduce their credit card balances, then what happens (check up to
three)? - ANS-Net demand for borrowing increases.
-Interest rates decrease.
-Corporate investment in factories and equipment increases.
Suppose that consumers decide to save a larger fraction of their income, while businesses
accelerate the expansion of their productive capacity. In these circumstances, we expect (mark
all that apply): - ANSThe total quantity of money borrowed to rise.
Each member of the Federal Reserve Board of Governors serves for a term of _____ years;
One of those members is appointed to be chair for a term of ____ years. - ANSFOURTEEN,
FOUR
The members of the Board of Governors of the Federal Reserve System are: - ANSNominated
by the President and confirmed by the Senate
The private banks that belong to the Federal Reserve system have considerable influence over
the selection of _____ of the seven members of the Board of Governors and ____ of the twelve
members of the Open Market Committee. - ANSZERO, FIVE
The structure of the Federal Reserve Bank deliberately helps to insulate it from pressure from
the President and Congress to ______, which would ______ over the long term. - ANSIncrease
the money supply; cause inflation.
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