DEPART'MENT O 1BANKING AND FINANCE
FACULTY OF MANAGEMENT SCIENCES
UNIVERSITY OF BENIN, BENIN CITY
1EN 313: MONETARY THEORY
FIRST SEMIESTER EXAMINA'TION 2019/2020 SESSION FUil, TIMI
NSTRUCTIONS: ANSWER QUESTION I &ANY O'TUER TIUREE. TIME: 2 IlOUk
Given the mode:
C 200+0 .75Y
= 3000.1Y -30r
M 0.25Y
M = 750-25r
Ms = 900
Find the equilibrium values of Y and r (25 Marks)
(2a) Define the IS and LM curves.
rate and income in the money and
Describe the behavioural relationship
between interest
bi)
output market. respcctively.
the IS and LM curves
ii. What are the economic policies that influence effectiveness of fiscal and monetary
demonstrate the
i. USing appropriate graphs discuss and
policies in the economy. (15 Marks)
succinct notes on the following:
tools, write clcar and
(3) With the aid of appropriate
Balanced-budget, multiplier
a)
nStimonts o! n:onciary poi!cy
Inflation
Monetarism. (15 Marks)
main bencfits of the schenie in
the concept of domiciliary
accounts; and statc the
Write
(4:2 on
Nigeria. (5 Marks)
determination of interest ratc level in
an
has become very crucial in the
The loanable funds theory explain this
the aid ol a wcll-labelled diagran, robustly
As much as possible And with
economy.
theory. (10 Marks)
factors determine the yicld curve? (5 Marks)
What is term structure of interest rate? And; what
(5a) the aid of diagram,
a state and explain each of therh by
The yicld curve is of three typcs. With
b) economic implications. (5 Marks)
bringing out their salient
of ihe common and uncommon yicld curves? (5 Marks)
c) What are the major causes
SAP Structural Adjustment Progranme (5Marks)
Enumerate five objeclives of
-
(6a)
Outline two Problems of SAP (9Marks)
b)
State five Criticisms of SAP (5,Marks)
c)
n
Csea smmas
Desyite
455
LNIVERSITY OFBhil BENIR CITY
STEE uNATION 2018/Z01s SESSIO
R T S : ANSt/ER QJESTiON 1& ANY OHt "HRFE TIME: 2 HOURS
Bis2: ETPY THECORY
Gfen the model
CaY
Y Y-
(S)
e t (Y)
rive 1S and iM Functions.
h e cquibrim valuesfor Y andr
i a doyou nmean bylags in monetary 20licy? hey afact monetary policy
Howdo
e s c i l e the oehavioural relationship betwaen nerest rate and income the money and
t arkets.
ii
i
i a r e an tha criterta for assessing r:uneiary
poicy.
at ae tha econamic policies that inflience ihe IS and i curves raspectivelyY
haip howeach affect the periormance of the
i Rter: he unction ofmoney and on
2r: n d LMralaiions?
:)+.SY-10
3.I-25r
LX
2SY
M oo-2
.. # TIV2iucsGi Yàngr
op*iment is.introduced.
reie is 10% and taxes are paid only
iie marinai rax
i i e i epend en income,
t:te ceds N100.
and t erest rate)
e 2 u i i n .valt:cs of Y and r (inceirg
3 *he inorey supply framework
nmultipiors.
deposit and the tnt:ldoprsit
i t h e demand
an uns:able eriity
fny is tihe multip!liar
concept.
s 5 s e on the m:itiplier anda cash ratio of 20%
creaier
C M e r i a i Sank with an initiai de
pctct N25 5:iior
potartial deposit creation.
bi!licn which reprasents ie:s thaithe
s5 M an Orcuirence
iie diiferénce and possible r2agors tCr 5uch
Ci : the ioaiae fund theory of interest
rate
cleariy expiin
n g eppropriate diagiams,
i2ury ct nierest rate.
: fie criticisns 2gnst the Keyesia:
acurnts in Nigetia.
c : four benefits ofitie domiciiiery
R9w ilsii?
Kpn the various iypes you
? e r siructure ofinterest rate? ' 2
G 0grams?
. 71dfs3Ein te 7Ein thcOriesof yi?ltur
DEPARTMENT OF BANKING AND FINANC
FACULTY OF MANAGIMENT
SCIENCES
UNIVERSITY OF BENIN, BENIN
BFN 313: MONETARY THEORY CITY.
NSTRUCTION: ANSWER QUESTION ONE AND ANY OT
HER THREE 201 6 SESSSION
TIME: 2 ho
Write onthe following. bringng Out tne sailent
(a) points contained
Lucidly define monetary policy lags. 'nerpin
(b) Distinguis!h be ween Quantitative
and aua!itative
(c Theorize cn the pitfals im
usig Bank Rate änd fMonctry Contro
Elucidate on he beinaviouräl Open Market Operans
money and output ma kets. relationship between interest rate nd income i
(e) Assess the criteria for
monetary policy
2.(a Review the functicns of
money and impact on the
(6) A Commercial Bank Wi han initial deposit econoiy.
of N25 biion and a
of N9O billio icn cash raticof 20% C2ated
rëpresents less than the potential capo3t
and posibie
reasons fer such an occurrence. deposit creation. Ceicnte tine direr2n
3(a Adopting tire money supply frame:
(i) Derive the demand deposit and the
tota:
Why is the multiplier an unstable entity. *deposit multipliers.
Expouse on the multip!lier concep.
(b) Ascertain the veracity 2nd
taisity of the foilowng sTatements and
The effectivenesS
or1onetary policy is enhanced when" : ioin
region. *r*ngmi is
i ne mSily rieed t: 0r
Lectord ait:i0n i Crdit in Nigeris as ieen Credit
and sectora! aliocation. guideliNes
(ir An increase in the reguired reserves ot Commercial anks with the Cep: Bank wiil lead to
increase in money supply.
4.(a) Robustiy discuss the historical development of the
Eurocurrency market.
(6) Discuss the problems t:at arise from the
practice of universal in bank.ng Nig
c) Why do nations embark on trade restrictions?
s(a) Using appropriate diagram, clearly explain the loarable fünd theory of intere
(b) Domiciliary accounts is
necessary to .Overcoming difficuities in foreign e.
modern internationa! trade and finance. Discuss? ge fonnalities
(c State four benefits cf th2 domiciliary accounts in Nigeria.
ct- What is term structure of interest rater State and cxplain the various tve usina
diagrams? opriate
State and explain the main theories of yield curve
(b)
f i e conditions for the
(c) implementation or tne structurai
the IMF. adjustment . gramime (SAP) by
A A L 1CA 1
FACULTY OF MANAGEMENT SCIENCES
UNIVERSITY OF BENIN, BENIN CITY
BEN 313- MONETARY THEORY
INSTRUCTIONS: ANSWER QUESTION ONE AND ANY OTHER THREE
TIME ALLOWED: 2 HOURS
(a) Write on the following bringing out the salient point contained therein:
Lucidly define monetary policy lags
Distinguish between Quantitative and Qualitative Mónetarý Controls
Theorize on the pitfals in using Bank rate and Open Market
Elucidate on the behavioral relationship between interest rate andincome in the money and
output market
(b) Given the model:
C-250 +0.75Y- 10r
I300+0.1Y 255r
Mi0.2SY
M:= 400 - 25r
M= 700, Find the equilibrYum values of Y and r.
ii. Suppose the Government is introduced
C 250 +0.65Yd
YY-T
T=-10 +0.1Y
G 180, Find the equilibrium values of Y and r.
Adopting the money supply framework,
Derive the demand deposit and the total deposit multiplierTS
ii. Why is the multiplier an unstable entity?
iii. Espouse on the multiplier concept.
of N25 billion and a cash ratio of 20% created
b) A Commercial Bank with an initial deposit the
than the' potential deposit creation. Calculate
deposits of N90 billion which represents less
difference and possible reasons for'such an occurrence.
3. (a) Elucidate or/ the quantity theory of Money
Cb) What are the differences between equation of exchange and the Cambridge cash balance
equation?
() Expouse on the theories of inflations
differen
4 As clearly as you can, explain what you understand by offshore Banking and explain the
types of offshore Banking centres known to you.
(b) Discuss briefly; the origin of the Eurocurrency market.
of interest ratt
5. As clearly as possible and with appropriate diagram, explain the loanable fund theorystill heavily
(6) Inspite of the laudable Keynesian theory of interest rate determination, it
was
criticized on six main grounds. State four of these criticisms.
, What is term structure of interest rate? State and explain its types using the appropriate aldgralu
(6) Exiplain the main theories that seek to explain the yield curve. (SA) oP
five conditions for the implemnentation of the Structural Adjustment Programme
CState
the IMF.
FINANCEE
AND
DEPARTMENT
OF B A N K I N G
UNIVERSITY OP BENIN
BENIN CITY
SESSION
2012/2013
SEMESTER
EXAMINATION TIN: 2 i0URg
LIRST THEORY
OTHER TUREE
1 AND ANY
M O N E T A R Y
BIN 33:
QUESTION
INSTRUCTIONS: ANSWER
curve and LM curve.
IS
I.
Define the
Given the niodel
e l - 0 R f6
C a bY
I=d-i (R)
T=e uY)
1-t
G
L = d - (R)+1(Y)
M= ¥
L= M
Dere tie IS and LM fun:tions.
Find the equilibriunm
for Y nd
values
2 bace Adiid reaios
Given the mocdei.
C 250 +.75Y -!
25r
l=300+0.1Y -
M =0.255Y
M 4 i - 25*|
3 6 6 7 -233 3
Suppose GoveITment is introdisd
C 250 .65Y" 36L6-233 3
= Y -T 2 t 2
T= -10 +.iY
Zb23
Gind !80
the cquiibrii:l vaies ot
Adopting ihe niony si}y!Tewrk,
depisit119itipljei's.
Deive the deimand deposit and the tota
the muiiiplicr an
unstable entity?
Why is
Espouse on the muiiicr cocOpt. 20%
a casii ratio ol
inisizl depsit of'N25 billion i
b. A Commereial Bank with
n
less thun the potentia! depisit crealion
creaied depcsiis of' NGO bI!lor hich rep:Esents
ocCNTene.
Cziculate the ilitierenc: 2nd pOSSIbi T2:tsCIRS for sCH
4. Lucidiy de!ine menetury poiey.
. Elucidie on mone*iy p:licy ugs.
. Distinguish ictween iianiiati2 and Qi'itiive credit, contr:s.
1v. Theorize on the f.is in using bank rae c ogren markct ojpertiotis.
. Criticaliy state tie riteria iir Sseising ni: i . r y piury.
5. Wih a weli labeied diagrai'. cicariycxplti:
a. The lotn.bie fund's theory f interest raie
h. Whal is term struetiic ofinte:c rae?
List and explain the various t y softern situeiu* inierest rate yoi i o .
0. i t e short noies on the folBoving
vCISal Banking
uiiiy A:Cinis
.Siruc:ral Adjust!ent Pi gimn
