MBA 820, Finance, Summer 2005, Final Exam

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MBA 820, Finance, Summer 2005, Final Exam OSU Ohio State University Answer Key Included Part I: Multiple-Choice: [1 point each] 1. If the Markets Desk at the New York Federal Reserve Bank purchases T-bills, this will: 1. Increase the Federal Funds Rate 2. Decrease the Federal Funds Rate 3. Raise the value of the dollar on the foreign exchange market 4. Lower the value of the dollar on the foreign exchange market 5. Both a and c 6. Both a and d 7. Both b and c 8. Both b and d 2. Demand influences production according to (choose the answer/answers that does/do NOT apply): 1. Classical Economics 2. Keynesian Economics 3. Monetarists 4. New Classical Economics 5. New Keynesian Economics 3. For a country to peg its exchange rate, the country’s central bank must (choose the answer/answers that does/do NOT apply): 1. Keep monetary autonomy 2. Change the money supply 3. Buy short term bonds 4. Buy foreign exchange 5. Accumulate reserves 4. GDP in 1981 was $2.96 trillion. It grew to $3.07 trillion in 1982, yet the quantity of output actually decreased. This is because: 1. Prices increased 2. GDP is not the same as Real GDP 3. Statistical discrepancies caused in error in the 1981 reading 4.

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