Econ 330 Questions and answers
graded A+
When the dollar is worth less in relation to currencies of other countries, are you more likely to buy
American-made or foreign-made electronics? - ANS✅✅American made
Are US companies that manufacture semi-conductors happier when the dollar is strong or when it is
weak?
Semi-conductor manufacturers are happier when the dollar is... - ANS✅✅weaker
What is the typical relationship between interest rates on 6-month Treasury bills, 10-year Treasury
notes, and Baa corporate bonds? - ANS✅✅They tend to move together over time with the
corporate bond having the highest rate of interest
When interest rates decrease, how might businesses and consumers change their economic
behavior? - ANS✅✅There will be more consumption spending on interest-sensitive items and
more investment by businesses.
How does a fall in the value of the pound sterling affect British consumers? - ANS✅✅Foreign
goods are now relatively more expensive; British consumers are hurt
Financial markets promote economic efficiency by - ANS✅✅channeling funds from savers to
investors.
The bond markets are important because they are - ANS✅✅the markets where interest rates are
determined.
High interest rates might ________ purchasing a house or car but at the same time high interest
rates might ________ saving. - ANS✅✅discourage; encourage
When stock prices fall - ANS✅✅an individual's wealth may decrease and their willingness to spend
may decrease.
Which of the following is not an important financial intermediary in the economy?
graded A+
When the dollar is worth less in relation to currencies of other countries, are you more likely to buy
American-made or foreign-made electronics? - ANS✅✅American made
Are US companies that manufacture semi-conductors happier when the dollar is strong or when it is
weak?
Semi-conductor manufacturers are happier when the dollar is... - ANS✅✅weaker
What is the typical relationship between interest rates on 6-month Treasury bills, 10-year Treasury
notes, and Baa corporate bonds? - ANS✅✅They tend to move together over time with the
corporate bond having the highest rate of interest
When interest rates decrease, how might businesses and consumers change their economic
behavior? - ANS✅✅There will be more consumption spending on interest-sensitive items and
more investment by businesses.
How does a fall in the value of the pound sterling affect British consumers? - ANS✅✅Foreign
goods are now relatively more expensive; British consumers are hurt
Financial markets promote economic efficiency by - ANS✅✅channeling funds from savers to
investors.
The bond markets are important because they are - ANS✅✅the markets where interest rates are
determined.
High interest rates might ________ purchasing a house or car but at the same time high interest
rates might ________ saving. - ANS✅✅discourage; encourage
When stock prices fall - ANS✅✅an individual's wealth may decrease and their willingness to spend
may decrease.
Which of the following is not an important financial intermediary in the economy?
