1.The Federal Reserve can influence financial crises because it: A)determines tax rates. B)determines government spending. C)conducts monetary policy. D)is responsive to the people who elected its members to office.
1.The Federal Reserve can influence financial crises because it:
A)determines tax rates.
B)determines government spending.
C)conducts
D)is responsive to the people who elected its members to office.
2.Janet Yellen is:
A)chair of the Board of Governors of the Federal Reserve System.
B)an AIG executive who received large bonuses.
C)a Supreme Court justice who ruled that budget deficits are unconstitutional.
D)a financial adviser on CNBC.
3.In 2014, Ben Bernanke was succeeded as chair of the Board of Governors of the Federal Reserve by:
A)Janet Yellen.
B)Paul Ryan.
C)Joe Biden.
D)Nancy Pelosi.
4.The chair of the Board of Governors during the 2008 financial crisis was:
A)Barack Obama.
B)Ben Bernanke.
C)J. P. Morgan.
D)John McCain.
5.Generally, the more liquid an asset is, the:
A)lower its
B)lower its
C)higher its capacity to store value over time.
D)higher its rate of return.
6.The short-term interest rate applies to financial assets that mature within:
A)less than a year.
B)a year or more.
C)2 years.
D)5 years.
7.If during 2007 the interest rate on one-month Treasury bills was 2.5% and during 2008 it was 2%, the
A)decreased.
B)became negative.
C)increased.
D)did not change.
8.If a checking account has an interest rate of 1% and a Treasury bill has an interest rate of 3%, the opportunity cost of holding cash in a checking account is:
A)zero.
B)0.02%.
C)1%.
D)2%.
9.People forgo interest and hold money:
A)because they are required to.
B)to reduce their transaction costs.
C)because there are no substitutes for money.
D)because banks are too risky.
10.If a checking account has an interest rate of 1% and a Treasury bill has an interest rate of 2%, the opportunity cost of holding the checking account as money is:
A)zero.
B)0.02%.
C)1%.
D)2%.
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