December 2020

 When the government fixes the exchange rate above market exchange rates, a. international trade falls. b. the infrastructure improves. c. real GDP per capita rises. d. the vicious circle of poverty is broken.

How would each of the following events change measured GDP? a. There is an increase in illegal drug sales. b. An oil spill causes pollution on beaches in California. c. There is a surge in sales of used cars, and there is a decline in sales of new cars.

Which of the following goods and services are included in GDP? If the good or service is included in GDP, in which expenditure category is it included? If the good or service is not included in GDP, explain why not. a. Cynthia buys some house paint. b. Cynthia uses the paint that she purchased to

Using data from the St. Louis Federal Reserve(FRED) (http://research.stlouisfed.org/fred2/), analyze the labor force and unemployment. a. Find the most recent values from FRED for these four variables: (1) Unemployed (UNEMPLOY), (2) Civilian Employment (CE16OV), (3) Employment Level – Part- Time for Economic Reasons, All Industries (LNS12032194), and (4) Not in Labor Force, Searched for Work

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze real and nominal interest rates. a. Find the most recent values from FRED for the following four variables: (1) 30-Year Conventional Mortgage Rate (MORTG), (2) Moody’s Seasoned Aaa Corporate Bond Yield (AAA), the 3-Month Treasury Bill: (3) Secondary Market Rate (TB3MS), the 10-Year Treasury

What purpose does the financial system serve?What is a financial intermediary? Give three examples of financial intermediaries. What are the three key services that financial intermediaries perform for savers and borrowers?

Explain the process of securitization. What Benefits does securitization of mortgage loans provide for banks? What benefits does securitization provide for people who want to buy a home? What are adverse selection and moral hazard? What problems can they cause for the financial system?

For each of the following transactions, identify whether it occurs in a financial market or through a financial intermediary. If the transaction occurs in a financial market, state whether it occurs in a primary or secondary market: a. A bank makes a mortgage loan to a home buyer. b. A bank sells a mortgage loan

For each of the following transactions, identify whether it occurs in a financial market or through a financial intermediary. If the transaction occurs in a financial market, state whether it occurs in a primary or secondary market: a. The federal government sells Treasury bills at a weekly auction, where they are purchased by a pension

For each of the following cases, explain whatservice the financial intermediary is providing to savers or borrowers: risk sharing, liquidity, or information. a. A mutual fund allows savers to purchase shares in a large number of firms. b. A bank takes in small deposits and makes mortgage loans. c. A life insurance company offers consumers