Anda di halaman 1dari 2

Question 1

All of the following EXCEPT one is a property of an illiquid market. Which one does not belong? Agents cannot buy or sell quickly Attempts to buy or sell tend to move prices around a lot Dealers in illiquid markets are well capitalized Agents cannot buy or sell large quantities easily

Question 2
Which of the following statements about the banking system of Bagehot's day is INCORRECT? The Bank of England could lend freely to meet an external drain because of its massive gold reserves A bank with too many discounts and too few notes could borrow from other banks using rediscount The division of the Bank of England into separate Banking and Issue departments served to keep notes scarce, and so acted as a mechanism of discipline The central bank could supply an internal drain because it was at a higher level in the moneycredit hierarchy than other banks

Question 3
Which of the following BEST describes the Bagehot Principle? In times of crisis, lend freely against security that would be good in normal times In times of crisis, lend selectively at market rates, only to those who you think will survive In times of crisis, lend freely at a low rate to prevent insolvent borrowers from failing Raise interest rates in booms, and lower them in recessions, to stabilize aggregate income

Question 4
Which of the following is NOT true about the discount mechanism in the "world that Bagehot knew"? Discounting banks change their quoted discount rates in order to balance their own cash inflow and outflow

The discounting bank raises its quoted discount rate to discourage demand for discount, and lowers to encourage The discounting bank can avoid liquidity risk by creating deposits rather than lending its note reserve The market rate of interest depends on the marketwide balance between cash inflow from maturing bills and cash outflow from new discounts

Question 5
According to our model of dealer behavior, if the demand for a particular security exhausts the dealer's inventory, which of the following is the dealer's MOST likely response? Raise the ask (selling) price, to discourage demand Lower the ask (selling) price Lower the bid (buying) price Stop quoting that security and lower the price on other securities to attract the demand

Question 6
Which of the following MOST accurately characterizes the economics of the dealer function? Dealers make money by keeping prices constant even as demand fluctuates Security markets become less liquid during a crisis because dealers have more difficulty making markets Dealers serve a social function by keeping prices at their fundamental value A fall in the bid-ask spread encourages more dealers to enter the market

Anda mungkin juga menyukai