1 Bank reserves are a......of the Federal Reserve
i) Asset
ii) Liability
iii) Reserve
iv) Deficit

2) The creation of new financial instruments has blurred the definition of money. This has implied that,
relative to the past, now central banks focus on
i) Broader monetary aggregates (such as M2 or M3)
ii) Narrower monetary aggregates (such as M1)
iii) Credit aggregates
iv) Exchange rates

3) Unlike commodity money, fiat money
i) Pays no interests
ii) Is not publicly accepted
iii) Has no intrinsic value
iv) Is issued by banks

4) In Keynes an increase of the interest rate.....the price of bonds
i) Increases
ii) Reduces
iii) Leaves unaffected

5) In Baumol and Tobin theory a decrease of the interest induces people to withdraw money more
i) Frequently
ii) Rarely
iii) Irregularly

6) In the neoclassical theory of investment the key variable for investment decisions is
i) The shoe leather cost
ii) The Tobin's q
iii) The marginal product of capital
iv) The discount rate

7) When the inflation rate is positive
i) Nominal GDP grows more than real GDP
ii) Nominal GDP grows less than real GDP
iii) Nominal GDP grows as much as real GDP

8) An increase in the cash/deposit ratio
i) Increases the money multiplier
ii) Decreases the money multiplier
iii) Leave the money multiplier unaffected
iv) Could be any of i), ii), iii)

9) The Fed prefers setting the discount rate rather than the amount of discount loans when the demand for discount loans
i) Is rigid
ii) Is flat
iii) Is upward sloping
iv) Is zero

10) The demand for money in Friedman is
i) More rigid than in Keynes
ii) Less rigid
iii) The same
iv) Could be either less or more rigid

11) An increase in the interest rate is likely to ...............the voluntary reserves of banks
i) Increase
ii) Decrease
iii) Leave unaffected
iv) Could be any of i), ii), iii)

12) Government bonds are.............the monetary aggregate M2
i) Excluded from
ii) Included in
iii) Included only if they are short term (3 or 6 months)
iv) Included only if they are long term (more than 6 months)