Economics 310 Money and Banking 2017 Fall

Final Examination
Name:
Student number:

Answer ONE question for each part.

Part I.

1.
Explain moral hazard and adverse selection.
2.
What are the pros and cons of fiat money.
3.
Explain the three theories of term structure of interest rate.
4.
Explain the risk structure of interest rate and expected utility theory.
5.
Explain the quantity theory of money and velocity of money.

Part II.
6.
What are the factors that affect the demand for money?
7.
What is a liquidity trap? What is crowding out effect?
8.
Explain the effects of an unanticipated increase in aggregate demand.
9.
Explain neutrality and super-neutrality of money.
10.
What are the advantages and disadvantages of a fixed exchange rate.