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ECO349H5 (11)

2013 Fall Mid-Term - Version A.pdf

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Michael H O

UNIVERSITY OF TORONTO DEPARTMENT OF ECONOMICS Money BankingFinancial Markets ECO349H5F LEC0101 MICHAEL HO MIDTERM TEST DURATION 90 MINUTES OCTOBER 16 2013 IMPORTANTi This test should be answered in ballpoint pen and any part done in pencil will not be eligible for reassessment ii You must put all your answers to Part A in the table provided on page 2 or a 10mark penalty will be imposed iii Answer all Part B questions in point form and only in the designated pagesAnswer every part of all the questions and clearly label each part of your answer iv Please ensure your handwriting is legible v Only nonprogrammable calculators are allowed vi A 10mark penalty will be imposed if any page is separated from this testStudent Name Print Clearly Student IDPart A Part BQuestion A1A25 B1 B2 Total Marks 50 30 20 100 abc dScoreVersion APage 1 of 11 PART A 50 Marks Answer all twentyfive multiplechoice questions and write each answer only in the table below or a 10mark penalty will be imposedPart AAnswers A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 A13 A14 A15 A16 A17 A18 A19 A20 A21 A22 A23 A24 A25 A1 High interest rates mightpurchasing a house or car but at the same time high interest rates mightsaving A discourage encourage B discourage discourage C encourage encourage D encourage discourageA2 Evidence from business cycle fluctuations in Canada indicates thatA a negative relationship between money growth and general economic activity exists B recessions have been preceded by declines in share prices on the stock exchange C recessions have been preceded by dollar depreciation D recessions have been preceded by a decline in the growth rate of moneyA3 Wellfunctioning financial marketsA cause inflation B eliminate the need for indirect finance C cause financial crises D produce an efficient allocation of capitalA4 Which of the following can be described as involving indirect finance A You make a loan to your neighbor B A corporation buys a share of common stock issued by another corporation in the primary market C You buy a Canadian Treasury bill from the Bank of Canada D You make a deposit at a bankA5 An example of the problem ofis when a corporation uses the funds raised from selling bonds to fund corporate expansion to pay for Caribbean cruises for all of its employees and their families A adverse selection B moral hazard C risk sharing D credit risk Version APage 2 of 11
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