LSU ECON 2035 FINAL EXAM NEWEST 2026 ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS (VERIFIED) { | LATEST
UPDATE 2026/2027 | GRADED A+ | BRAND NEW | 100%
GUARANTEED PASS
risk neutral - ANSWER-an investor who bases the decision to buy an asset solely
on the expected return of an asset is considered to be
the coupon divided by the market price of the bond - ANSWER-the current yield
is equal to
increases in expected inflation - ANSWER-which of the following is NOT a reason
that interest rates remained low following the financial crisis?
anything that is generally accepted as payment for goods and services or in the
settlement of debts - ANSWER-Money can BEST be described as
management of the money supply and interest rates to achieve macroeconomic
objectives - ANSWER-monetary policy refers to the government's
they interest rate on other similar bonds must have risen - ANSWER-If, while you
are holding a coupon bond, its market price falls, it is most likely that
savings account deposits - ANSWER-Which of the following is NOT included in
M1?
increase; right - ANSWER-Higher government deficits _______ the supply of
bonds and shift the supply curve to the _____
,stock exchange - ANSWER-Which of the following is NOT a financial
intermediary?
more interest paid over the life of the loan - ANSWER-Which of the following is a
consequence of extending the payback period of a student loan from 10 to 30
years?
decreases - ANSWER-an increase in the time to the promised future payment
______________ the present value of the payment
liability to Intel and an asset to you - ANSWER-If you buy a bond issued by Intel,
the bond is a(an)
present value of all future payments - ANSWER-The price of a financial asset
equals the
increased default risk - ANSWER-which of the following will result in a decrease
in the price of an existing corporate bond?
the number of times each dollar in the money supply is used to buy goods and
services included in GDP - ANSWER-The velocity of money can best be
described as
our society's willingness to use dollar bills issued by the Federal Reserve as
money - ANSWER-What determines the acceptability of dollar bills as a medium
of exchange?
an increase in the price level - ANSWER-Which of the following will cause the
money demand curve to shift to the right?4% - ANSWER-Suppose you have a
fixed-rate mortgage with a nominal interest rate of 6% and the expected annual
inflation rate over the life of the mortgage is 2%. What is the expected real
interest rate?
,savers to hold many assets - ANSWER-the financial system provides risk sharing
by allowing:
a lawsuit because the corporation produced a faulty product - ANSWER-Which
is the best example of idiosyncratic risk?
an unsustainable increase in the price of a class of assets - ANSWER-Which of
the following best describes a "bubble"?
financial assets but not financial securities - ANSWER-ordinary loans cannot be
resold after they have been granted by a bank or another lender. Therefore,
these loans are
low; high - ANSWER-When nominal interest rates on financial assets are low, the
opportunity cost of holding money is _____________, so the quantity of money
demanded by households and firms will be ____________.
inflation - ANSWER-Research has shown that nations with highly independent
central banks tend to have low
either the quantity of money and /or the velocity of money must also increase -
ANSWER-According to the equation of exchange, if nominal GDP increases then
money market mutual fund - ANSWER-Which of the following assets is the most
liquid?
bond prices rise and interest rates fall - ANSWER-as wealth increases in the
economy, we would expect to observe ____________
the yield to maturity must be less than the coupon rate - ANSWER-If the current
price of a bond is greater than its face value :
, only agricultural goods may be traded - ANSWER-Which of the following is NOT
a significant cost that a barter system imposes on an economy?
the interest rate will fall - ANSWER-If there is an excess demand for bonds at a
given price of bonds, then
short-term yields are higher than long-term yields - ANSWER-When the yield
curve is downward-sloping
agencies charge firms for their services rather than investors, they have an
incentive to give high ratings to gain business - ANSWER-Some claim that
ratings agencies have a conflict of interest since
borrowers know more than lenders - ANSWER-Problems of asymmetric
information usually occur in financial markets because
lower demand for US products and layoffs of US workers - ANSWER-A
substantial appreciation of the US dollar will likely result in, all else equal
stocks with high returns today to experience low returns in the future and for
stocks with low returns today to experience high returns in the future -
ANSWER-Mean reversion refers to the tendency for
gathering information about the default risk of borrowers - ANSWER-Banks deal
with problems of adverse selection by
increases; decreases - ANSWER-Rising stock prices _______ household wealth,
which _________ consumption spending
slope upward - ANSWER-under the expectations theory, if market participants
expect that future short-term rates will be higher than current short-term rates,
the yield curve will
QUESTIONS AND CORRECT ANSWERS (VERIFIED) { | LATEST
UPDATE 2026/2027 | GRADED A+ | BRAND NEW | 100%
GUARANTEED PASS
risk neutral - ANSWER-an investor who bases the decision to buy an asset solely
on the expected return of an asset is considered to be
the coupon divided by the market price of the bond - ANSWER-the current yield
is equal to
increases in expected inflation - ANSWER-which of the following is NOT a reason
that interest rates remained low following the financial crisis?
anything that is generally accepted as payment for goods and services or in the
settlement of debts - ANSWER-Money can BEST be described as
management of the money supply and interest rates to achieve macroeconomic
objectives - ANSWER-monetary policy refers to the government's
they interest rate on other similar bonds must have risen - ANSWER-If, while you
are holding a coupon bond, its market price falls, it is most likely that
savings account deposits - ANSWER-Which of the following is NOT included in
M1?
increase; right - ANSWER-Higher government deficits _______ the supply of
bonds and shift the supply curve to the _____
,stock exchange - ANSWER-Which of the following is NOT a financial
intermediary?
more interest paid over the life of the loan - ANSWER-Which of the following is a
consequence of extending the payback period of a student loan from 10 to 30
years?
decreases - ANSWER-an increase in the time to the promised future payment
______________ the present value of the payment
liability to Intel and an asset to you - ANSWER-If you buy a bond issued by Intel,
the bond is a(an)
present value of all future payments - ANSWER-The price of a financial asset
equals the
increased default risk - ANSWER-which of the following will result in a decrease
in the price of an existing corporate bond?
the number of times each dollar in the money supply is used to buy goods and
services included in GDP - ANSWER-The velocity of money can best be
described as
our society's willingness to use dollar bills issued by the Federal Reserve as
money - ANSWER-What determines the acceptability of dollar bills as a medium
of exchange?
an increase in the price level - ANSWER-Which of the following will cause the
money demand curve to shift to the right?4% - ANSWER-Suppose you have a
fixed-rate mortgage with a nominal interest rate of 6% and the expected annual
inflation rate over the life of the mortgage is 2%. What is the expected real
interest rate?
,savers to hold many assets - ANSWER-the financial system provides risk sharing
by allowing:
a lawsuit because the corporation produced a faulty product - ANSWER-Which
is the best example of idiosyncratic risk?
an unsustainable increase in the price of a class of assets - ANSWER-Which of
the following best describes a "bubble"?
financial assets but not financial securities - ANSWER-ordinary loans cannot be
resold after they have been granted by a bank or another lender. Therefore,
these loans are
low; high - ANSWER-When nominal interest rates on financial assets are low, the
opportunity cost of holding money is _____________, so the quantity of money
demanded by households and firms will be ____________.
inflation - ANSWER-Research has shown that nations with highly independent
central banks tend to have low
either the quantity of money and /or the velocity of money must also increase -
ANSWER-According to the equation of exchange, if nominal GDP increases then
money market mutual fund - ANSWER-Which of the following assets is the most
liquid?
bond prices rise and interest rates fall - ANSWER-as wealth increases in the
economy, we would expect to observe ____________
the yield to maturity must be less than the coupon rate - ANSWER-If the current
price of a bond is greater than its face value :
, only agricultural goods may be traded - ANSWER-Which of the following is NOT
a significant cost that a barter system imposes on an economy?
the interest rate will fall - ANSWER-If there is an excess demand for bonds at a
given price of bonds, then
short-term yields are higher than long-term yields - ANSWER-When the yield
curve is downward-sloping
agencies charge firms for their services rather than investors, they have an
incentive to give high ratings to gain business - ANSWER-Some claim that
ratings agencies have a conflict of interest since
borrowers know more than lenders - ANSWER-Problems of asymmetric
information usually occur in financial markets because
lower demand for US products and layoffs of US workers - ANSWER-A
substantial appreciation of the US dollar will likely result in, all else equal
stocks with high returns today to experience low returns in the future and for
stocks with low returns today to experience high returns in the future -
ANSWER-Mean reversion refers to the tendency for
gathering information about the default risk of borrowers - ANSWER-Banks deal
with problems of adverse selection by
increases; decreases - ANSWER-Rising stock prices _______ household wealth,
which _________ consumption spending
slope upward - ANSWER-under the expectations theory, if market participants
expect that future short-term rates will be higher than current short-term rates,
the yield curve will
