Economics > EXAM > Monetary Economics (ECS3701) Selected Examination Questions and suggested solutions [211581]2023 (All)
Monetary Economics (ECS3701) Selected Examination Questions and suggested solutions [211581]2023
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Facts that theory of term and structure of interest rates must explain - -1- interest rates on bonds of different maturities move together over time 2- When short term interest are low, yield curve... have an upward slope. When short term interest are high, yield curve have an downward slope. 3- Yield curve almost always slope upward -liquidity premium theory (ex) - -- Suggests that since investors are risk averse, they will demand a greater premium for securities with longer maturity periods - prefer short term than long term because bonds are free of inflation and interest rates risks - Bonds of different maturities are partial (not perfect) substitutes. -monetary base (ex) - -MB=C+R C= currency in circulation R= total reserves in the banking sustem Note: the MB in a country is defined as the portion of the commercial banks' reserves that are maintained in accounts with their central bank plus the total currency circulating in the public -Taylor rule for monetary policy (ex) - - -interest parity condition (ex) - - [Show More]
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Monetary Economics (ECS3701) Selected Examination Questions and suggested solutions 2023
Assets are things that are useful or things that have value. T or F. - -True -One of the most important prices determined in financial markets is the __________________ rate. - -interest -When a...
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The flow of revenue we receive over time for our services. - -Income -Businesses use their savings to make ___________________ expenditures in capital equipment, inventories, and to acquire financi...
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