Question
9) Which asset is NOT included in M2? demand deposits large-denomination time deposits savings deposits currency 11)The primary purpose of financial markets and institutions is
9) Which asset is NOT included in M2?
demand deposits
large-denomination time deposits
savings deposits
currency
11)The primary purpose of financial markets and institutions is to help transfer funds from lenders to borrowers.
False
True
13) Which of these is NOT a necessary characteristic for something to be accepted and used as money?
It is generally accepted by society.
It must have the words "legal tender" on it.
It is easily standardized.
It is divisible.
14) What is likely to happen if the government runs a budget surplus?
Loanable funds are removed from the market, leading to lower interest rates.
Additional loanable funds are provided to the market, leading to higher interest rates.
Loanable funds are removed from the market, leading to higher interest rates.
Additional loanable funds are provided to the market, leading to lower interest rates.
15)Suppose a $1,000 bond has a coupon rate of 3%, but interest rates in the market double to 6%. If the risk of the bond remains the same, what would the bond now be worth?
$333
$2,000
$500
$1,667
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