Question 1

Which best describes the relationship between the cost of acquiring information and return?

Accepted Answer

A)  A high return must compensate for a high cost of acquiring information. 
B)  A higher cost of information corresponds with a low return. 
C)  A low cost of acquiring information corresponds with a high return. 
D)  A higher return results in a lower cost of acquiring information. 
A)  A high return must compensate for a high cost of acquiring information. 
B)  A higher cost of information corresponds with a low return. 
C)  A low cost of acquiring information corresponds with a high return. 
D)  A higher return results in a lower cost of acquiring information.

Question 2

When nominal interest rates on financial assets are low,the opportunity cost of holding money is ________,so the quantity of money demanded by households and firms will be ________.

Accepted Answer

A)  high; high 
B)  high; low 
C)  low; high 
D)  low; low 
A)  high; high 
B)  high; low 
C)  low; high 
D)  low; low

Question 3

The Federal Reserve issues a report indicating that future inflation will be higher than had previously seemed likely.As a result

Accepted Answer

A)  the supply curve for bonds shifts to the right. 
B)  the demand curve for loanable funds shifts to the left. 
C)  the equilibrium interest rate falls. 
D)  the equilibrium price of bonds rises. 
A)  the supply curve for bonds shifts to the right. 
B)  the demand curve for loanable funds shifts to the left. 
C)  the equilibrium interest rate falls. 
D)  the equilibrium price of bonds rises.

Which best describes the relationship between the cost of acquiring information and return?

When nominal interest rates on financial assets are low,the opportunity cost of holding money is ,so the quantity of money demanded by households and firms will be .

The Federal Reserve issues a report indicating that future inflation will be higher than had previously seemed likely.As a result

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

Exam 4: Determining Interest Rates

Which best describes the relationship between the cost of acquiring information and return?

When nominal interest rates on financial assets are low,the opportunity cost of holding money is ________,so the quantity of money demanded by households and firms will be ________.

The Federal Reserve issues a report indicating that future inflation will be higher than had previously seemed likely.As a result

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

When nominal interest rates on financial assets are low,the opportunity cost of holding money is ,so the quantity of money demanded by households and firms will be .