On May 11, 2011, it cost 11.601 Mexican pesos to buy 1 U.S. dollar. How many U.S. dollars did it take to buy a Mexican peso?
A. $11.11
B. $10.82
C. $8.92
D. $0.09
Answer: D
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The Federal Open Market Committee engages in contractionary monetary policy by
A) lowering interest rates. B) creating excess reserves. C) selling bonds. D) buying bonds.
As interest rates rise, a firm would
A. have increasing present value of expected earning. B. have lower expected costs of investment. C. be willing to pay less now to purchase the same number of future dollars. D. be willing to pay more now to purchase the same number of future dollars.
Prudential supervision is, in essence, the monitoring of ________
A) borrowers, to enforce restrictive covenants B) intermediaries, to direct credit to preferred sectors of the economy C) holders of an insurance policy, to discourage excessively risky behaviors D) depositors, to discourage sudden withdrawal of funds
The federal funds rate is
a. the minimum rate associated with the amount of reserves the Fed requires a bank to hold b. the interest rate that the Fed charges banks who borrow from it c. the interest rate charged by banks that lend reserves to other banks for short periods of time d. the maximum rate of the price of a stock that can be borrowed from a bank, with the stock offered as collateral e. an appeal by the Fed to banks, asking for voluntary compliance with the Fed's policies concerning interest rates