第4单元金融考试题西南财经大学天府学院

1、Financial Markets and Institutions, 7e(Mishkin)Chapter 4 Why Do Interest Rates Change?4.1 Multiple Choice1) As the price of a bond and the expected return , bonds become more attractive toinvestors and the quantity demanded rises.A) falls; risesB) falls; fallsC) rises; risesD) rises; fallsAnswer: A2

2、) The supply curve for bonds has the usual upward slope, indicating that as the price c_e,terisparibus, the increases.A) falls; supplyB) falls; quantity suppliedC) rises; supplyD) rises; quantity suppliedAnswer: D3) When the price of a bond is above the equilibrium price, there is excess in the bond

3、 marketand the price will .A) demand; riseB) demand; fallC) supply; fallD) supply; riseAnswer: C4) When the price of a bond is below the equilibrium price, there is excess in the bond marketand the price will .A) demand; riseB) demand; fallC) supply; fallD) supply; riseAnswer: A5) When the price of

4、a bond is the equilibrium price, there is an excess supply of bonds andthe price will .A) above; riseB) above; fallC) below; fallD) below; riseAnswer: B6) When the price of a bond is the equilibrium price, there is an excess demand for bonds andthe price will .A) above; riseB) above; fallC) below; f

5、allD) below; riseAnswer: D7) When the interest rate on a bond is above the equilibrium interest rate, there is excess in thebond market and the interest rate will .A) demand; riseB) demand; fallC) supply; fallD) supply; riseAnswer: B8) When the interest rate on a bond is below the equilibrium intere

6、st rate, there is excess inthe bond market and the interest rate will .A) demand; riseB) demand; fallC) supply; fallD) supply; riseAnswer: D9) When the interest rate on a bond is the equilibrium interest rate, there is excess in the bond market and the interest rate will .A) above; demand; fallB) ab

7、ove; demand; riseC) below; supply; fallD) above; supply; riseAnswer: A10) When the interest rate on a bond is the equilibrium interest rate, there is excess in the bond market and the interest rate will .A) below; demand; riseB) below; demand; fallC) below; supply; riseD) above; supply; fall Answer:

8、 C11) When the demand for bonds or the supply of bonds , interest rates rise.A) increases; increasesB) increases; decreasesC) decreases; decreasesD) decreases; increases Answer: D12) When the demand for bonds or the supply of bonds , interest rates fall.A) increases; increasesB) increases; decreases

9、C) decreases; decreasesD) decreases; increases Answer: B13) When the demand for bonds or the supply of bonds , bond prices rise.A) increases; decreasesB) decreases; increasesC) decreases; decreasesD) increases; increasesAnswer: A14) When the demand for bonds or the supply of bonds , bond prices fall

10、.A) increases; increasesB) increases; decreasesC) decreases; decreasesD) decreases; increases Answer: D15) Factors that determine the demand for an asset include changes in theA) wealth of investors.B) liquidity of bonds relative to alternative assets.C) expected returns on bonds relative to alterna

11、tive assets.D) risk of bonds relative to alternative assets.E) all of the above.Answer: E16) The demand for an asset rises if falls.A) risk relative to other assetsB) expected return relative to other assetsC) liquidity relative to other assetsD) wealth Answer: A17) The higher the standard deviation

12、 of returns on an asset, the the assets A) greater; riskB) smaller; riskC) greater; expected returnD) smaller; expected return Answer: A18) Diversification benefits an investor byA) increasing wealth.B) increasing expected return.C) reducing risk.D) increasing liquidity.Answer: C19) In a recession w

13、hen income and wealth are falling, the demand for bonds and the demandcurve shifts to the .A) falls; rightB) falls; leftC) rises; rightD) rises; leftAnswer: B20) During business cycle expansions when income and wealth are rising, the demand for bonds and the demand curve shifts to the .A) falls; rig

14、htB) falls; leftC) rises; rightD) rises; leftAnswer: C21) Higher expected interest rates in the future the demand for long-term bonds and shift thedemand curve to the .A) increase; leftB) increase; rightC) decrease; leftD) decrease; rightAnswer: C22) Lower expected interest rates in the future the d

15、emand for long-term bonds and shift thedemand curve to the A) increase; left.B) increase; right.C) decrease; left.D) decrease; right.Answer: B23) When people begin to expect a large stock market decline, the demand curve for bonds shifts to the and the interest rate .A) right; fallsB) right; risesC)

16、 left; fallsD) left; risesAnswer: A24) When people begin to expect a large run up in stock prices, the demand curve for bonds shifts to the and the interest rate .A) right; risesB) right; fallsC) left; fallsD) left; risesAnswer: D25) An increase in the expected rate of inflation will the expected re

17、turn on bonds relative tothat on assets, and shift the curve to the left.A) reduce; financial; demandB) reduce; real; demandC) raise; financial; supplyD) raise; real; supplyAnswer: B26) A decrease in the expected rate of inflation will the expected return on bonds relative tothat on assets.A) reduce

18、; financialB) reduce; realC) raise; financialD) raise; realAnswer: D27) When the expected inflation rate increases, the demand for bonds , the supply of bonds, and the interest rate .A) increases; increases; risesB) decreases; decreases; fallsC) increases; decreases; fallsD) decreases; increases; ri

19、sesAnswer: D28) When the expected inflation rate decreases, the demand for bonds , the supply of bonds, and the interest rate .A) increases; increases; risesB) decreases; decreases; fallsC) increases; decreases; fallsD) decreases; increases; rises Answer: C29) When bond prices become more volatile,

20、the demand for bonds and the interest rateA) increases; risesB) increases; fallsC) decreases; fallsD) decreases; rises Answer: D30) When bond prices become less volatile, the demand for bonds and the interest rateA) increases; risesB) increases; fallsC) decreases; fallsD) decreases; risesAnswer: B31

21、) When prices in the stock market become more uncertain, the demand curve for bonds shifts to the and the interest rate .A) right; risesB) right; fallsC) left; fallsD) left; risesAnswer: B32) When stock prices become less volatile, the demand curve for bonds shifts to the and theinterest rate .A) ri

22、ght; risesB) right; fallsC) left; fallsD) left; risesAnswer: D33) When bonds become more widely traded, and as a consequence the market becomes more liquid, the demand curve for bonds shifts to the and the interest rate .A) right; risesB) right; fallsC) left; fallsD) left; risesAnswer: B34) When bon

23、ds become less widely traded, and as a consequence the market becomes less liquid, the demand curve for bonds shifts to the and the interest rate .A) right; risesB) right; fallsC) left; fallsD) left; risesAnswer: D35) Factors that cause the demand curve for bonds to shift to the left includeA) an in

24、crease in the inflation rate.B) an increase in the liquidity of stocks.C) a decrease in the volatility of stock prices.D) all of the above.E) none of the above.Answer: D36) Factors that cause the demand curve for bonds to shift to the left includeA) a decrease in the inflation rate.B) an increase in

25、 the volatility of stock prices.C) an increase in the liquidity of stocks.D) all of the above.E) only A and B of the above. Answer: C37) During an economic expansion, the supply of bonds and the supply curve shifts to theA) increases, leftB) increases, rightC) decreases, leftD) decreases, right Answ

26、er: B38) During a recession, the supply of bonds and the supply curve shifts to the A) increases, leftB) increases, rightC) decreases, leftD) decreases, rightAnswer: C39) An increase in expected inflation causes the supply of bonds to and the supply curve toshift to the .A) increase, leftB) increase

27、, rightC) decrease, leftD) decrease, rightAnswer: B40) When the federal governments budget deficit increases, the curve for bonds shifts to theA) demand; rightB) demand; leftC) supply; leftD) supply; right Answer: D41) When the federal governments budget deficit decreases, the curve for bonds shifts

28、 to theA) demand; rightB) demand; leftC) supply; leftD) supply; right Answer: C42) When the in flati on rate is expected to in crease, the expected return on bonds relative to real assets falls for any give n in terest rate; as a result, thebonds falls and thecurve shifts tothe left.A) dema nd for;

29、dema ndB) dema nd for; supplyC) supply of; dema ndD) supply of; supplyAn swer: A43) When the in flati on rate is expected to in crease, the real cost of borrowi ng decli nes at any give n in terest rate; as a result, thebonds in creases and thecurve shifts to the right.A) dema nd for; dema ndB) dema

30、 nd for; supplyC) supply of; dema ndD) supply of; supplyAn swer: DInterestRate, ii Increases )Figure 4.144) In Figure 4.1, the most likely cause of the in crease in the equilibrium in terest rate fromi to i? isA) an in crease in the price of bon ds.B) a bus in ess cycle boom.C) an in crease in the e

31、xpected in flati on rate.D) a decrease in the expected inflation rate.An swer: C45) In Figure 4.1, the most likely cause of the in crease in the equilibrium in terest rate froml to i? is a(n) in the.A) in crease; expected in flati on rateB) decrease; expected in flati on rateC) in crease; gover nmen

32、t budget deficitD) decrease; gover nment budget deficitAn swer: A46) In Figure 4.1, the most likely cause of a decrease in the equilibrium interest rate from2ito i1 isA) an increase in the expected inflation rate.B) a decrease in the expected inflation rate.C) a business cycle expansion.D) a combina

33、tion of both A and C of the above. Answer: B47) Factors that can cause the supply curve for bonds to shift to the right includeA) an expansion in overall economic activity.B) a decrease in expected inflation.C) a decrease in government deficits.D) all of the above.E) only A and B of the above. Answe

34、r: A48) Factors that can cause the supply curve for bonds to shift to the left includeA) an expansion in overall economic activity.B) a decrease in expected inflation.C) an increase in government deficits.D) only A and C of the above.Answer: B49) The economist Irving Fisher, after whom the Fisher ef

35、fect is named, explained why interest rates as the expected rate of inflation .A) rise; increasesB) rise; stabilizesC) rise; decreasesD) fall; increasesE) fall; stabilizesAnswer: A50) An increase in the expected rate of inflation causes the demand for bonds to and thesupply for bonds to .A) fall; fa

36、llB) fall; riseC) rise; fallD) rise; riseAnswer: B51) A decrease in the expected rate of inflation causes the demand for bonds to and the supplyof bonds to .A) fall; fallB) fall; riseC) rise; fallD) rise; riseAnswer: C52) When the economy slips into a recession, normally the demand for bonds , the s

37、upply ofbonds , and the interest rate .A) increases; increases; risesB) decreases; decreases; fallsC) increases; decreases; fallsD) decreases; increases; risesAnswer: B53) When the economy enters into a boom, normally the demand for bonds ,the supply of bonds , and the interest rate .A) increases; i

38、ncreases; risesB) decreases; decreases; fallsC) increases; decreases; risesD) decreases; increases; rises Answer: AInterestRale, i(i Increases )Figure 4.254) In Figure 4.2, one possible expla nati on for the in crease in the in terest rate from to i? is a(n) in.A) in crease; the expected in flati on

39、 rateB) decrease; the expected in flati on rateC) in crease; econo mic growthD) decrease; econo mic growthAn swer: C55) In Figure 4.2, one possible expla nati on for the in crease in the in terest rate from ito i2 isA) an in crease in econo mic growth.B) an in crease in gover nment budget deficits.C

40、) a decrease in gover nment budget deficits.D) a decrease in econo mic growth.E) a decrease in the risk in ess of bonds relative to other inv estme nts.An swer: A56) In Figure 4.2, one possible expla nati on for a decrease in the in terest rate from to i isA) an in crease in gover nment budget defic

41、its.B) an in crease in expected in flati on.C) a decrease in econo mic growth.D) a decrease in the risk in ess of bonds relative to other inv estme nts.An swer: C57) In Keyness liquidity preference framework, individuals are assumed to hold their wealth in two forms:A) real assets and finan cial ass

42、ets.B) stocks and bon ds.C) money and bon ds.D) money and gold.An swer: C58) In his liquidity preference framework, Keynes assumed that money has a zero rate of return; thus,when interest rates the expected return on money falls relative to the expected return on bonds,causing the demand for money t

43、o .A) rise; fallB) rise; riseC) fall; fallD) fall; riseAnswer: A59) The loanable funds framework is easier to use when analyzing the effects of changes in while the liquidity preference framework provides a simpler analysis of the effects from changes in income, the price level, and the supply of A)

44、 expected inflation; bonds.B) expected inflation; money.C) government budget deficits; bonds.D) the supply of money; bonds.Answer: B60) When comparing the loanable funds and liquidity preference frameworks of interest rate determination, which of the following is true?A) The liquidity preference fra

45、mework is easier to use when analyzing the effects of changes in expected inflation.B) The loanable funds framework provides a simpler analysis of the effects of changes in income, the price level, and the supply of money.C) In most instances, the two approaches to interest rate determination yield

46、the same predictions.D) All of the above are true.E) Only A and B of the above are true. Answer: C61) A higher level of income causes the demand for money to and the interest rate toA) decrease; decrease.B) decrease; increase.C) increase; decrease.D) increase; increase. Answer: D62) A lower level of

47、 income causes the demand for money to and the interest rate toA) decrease; decrease.B) decrease; increase.C) increase; decrease.D) increase; increase.Answer: A63) A rise in the price level causes the demand for money to and the demand curve to shift tothe A) decrease; right.B) decrease; left.C) inc

48、rease; right.D) increase; left.Answer: C64) A decline in the price level causes the demand for money to and the demand curve to shiftto the A) decrease; right.B) decrease; left.C) increase; right.D) increase; left.Answer: B65) A decline in the expected inflation rate causes the demand for money to a

49、nd the demandcurve to shift to the A) decrease; right.B) decrease; left.C) increase; right.D) increase; left. Answer: B66) Holding everything else constant, an increase in the money supply causesA) interest rates to decline initially.B) interest rates to increase initially.C) bond prices to decline

50、initially.D) both A and C of the above.E) both B and C of the above. Answer: A67) Holding everything else constant, a decrease in the money supply causesA) interest rates to decline initially.B) interest rates to increase initially.C) bond prices to increase initially.D) both A and C of the above.E)

51、 both B and C of the above. Answer: BQuantity of Money, MFigure 4.368) In Figure 4.3, the factor responsible for the decline in the interest rate isA) a decli ne in the price level.B) a decli ne in in come.C) an in crease in the money supply.D) a decline in the expected inflation rate.An swer: C69)

52、In Figure 4.3, the decrease in the in terest rate from1ito i2 can be expla ined byA) a decrease in money growth.B) an in crease in money growth.C) a decli ne in the expected price level.D) only A and B of the above.An swer: B70) In Figure 4.3, an in crease in the in terest rate from2 to i1 can be ex

53、pla ined byA) a decrease in money growth.B) an in crease in money growth.C) a decli ne in the price level.D) an in crease in the expected price level.An swer: A71) If the liquidity effect is smaller than the other effects, and the adjustment of expected inflation is slow, then theA) interest rate wi

54、ll fall.B) interest rate will rise.C) interest rate will initially fall but eventually climb above the initial level in response to an increase in money growth.D) interest rate will initially rise but eventually fall below the initial level in response to an increase in money growth.Answer: C72) Whe

55、n the growth rate of the money supply increases, interest rates end up being permanently lower ifA) the liquidity effect is larger than the other effects.B) there is fast adjustment of expected inflation.C) there is slow adjustment of expected inflation.D) the expected inflation effect is larger tha

56、n the liquidity effect. Answer: A73) When the growth rate of the money supply decreases, interest rates end up being permanently lower ifA) the liquidity effect is larger than the other effects.B) there is fast adjustment of expected inflation.C) there is slow adjustment of expected inflation.D) the expected inflation effect is larger than the liquidity effect. Answer: D74) When the growth rate of the money supp