1) In comparing money market and capital market instruments, money market instruments are typically

a) riskier than capital market instruments

b) less liquid than capital market instruments

c) riskier, but more liquid than capital market instruments

d) more liquid than capital market instruments

2) An increase in the volume of discount loans

a) increases the monetary base but decreases the money supply

b) decreases the monetary base but increases the money supply

c) increases both the monetary base and the money supply

d) decreases both the monetary base and the money supply

3) In a large open economy

a) an increase in domestic saving would lower the world real interest rate

b) an increase in domestic investment would lower the world real interest rate

c) domestic saving and investment decisions have no impact on the world real interest rate

d) the domestic equilibrium real interest rate is determined independently of foreign borrowing and lending

4) The duration of a bank's assets equals the

a) asset's market value divided by the market interest rate

b) percentage change in the asset's market value divided by the percentage change in the market interest rate

c) market interest rate divided by the asset's market value

d) percentage change in the market interest rate divided by the percentage change in the asset's market