Econ 312- Final Exam with complete
solutions 2024/2025
1. Open Mkt Operations of buying/selling government securities (Major)
2. Reserve Ratio Major)
3. Discount Rate (Major)
4. Interest Rate paid on Fed's Reserves (Minor)
5. Term Faculty Auctions (not used much anymore) - ANSWER-Quantitative tools
of the Fed
1. Margin Requirements
2. Down Pmt requirements on home mortgages (20%)
3. Moral Suasion (not used much anymore) - ANSWER-Qualitative tools of the Fed
Transaction Demand - ANSWER-function of income; (vertical straight line)
Asset Demand - ANSWER-function of real interest rates (Slanting left to right)
Precautionary Demand - ANSWER-function of unanticipated economic events
Ponzi Schemes - ANSWER-investments in which investors are unknowingly paid
returns directly from the investments made by new investors
, 1. Create a message of Hope of earning really high rates of return on some initial
investment
2. Using very creative accounting to "cover up" the true economics of what's
really happening
3. key to success is garnishing interest from a seemingly never-ending supply of
net participants - ANSWER-Ponzi Scheme Stages: (3)
Phillips Curve - ANSWER-suggests an inverse relationship between the rate of
inflation and the rate of unemployment
higher rates of inflation - ANSWER-Lower unemployment rates are associated
with :
Laffer Curve - ANSWER-depicts the relationship between tax rates and tax
revenues
tax revenues increase from 0 to some maximum level (at M) and then fall to zero -
ANSWER-Laffer: As tax rates increase from 0-100% :
Misery Index - ANSWER-expresses the sum of the unemployment rate and the
inflation rate as a rough gauge of the economic discomfort that inflation and
unemployment jointly impose on an economy in a particular year
Fractional Reserve Banking System - ANSWER-only a portion of checkable
deposits are backed up by reserves of currency in bank vaults or deposits at the
central bank
Goldsmith Practices of long ago - ANSWER-Fractional Reserve Banking is based
on:
Money Multiplier - ANSWER-defines the relationship between any new excess
reserves in the banking system and the magnified creation of new checkable-
deposit money by banks as a group
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller tuition. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.