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ECO 4223 MIDTERM QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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ECO 4223 MIDTERM QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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ECO 4223 MIDTERM QUESTIONS ANDANSWERS WITH SOLUTIONS 2024
Identify which item is not apart of the six parts of the financial system - ANSWER Credit cards
The central bank of the United States is - ANSWER Federal Reserve System
Identify which of the following is not one of the five core principles of money and banking - ANSWER
Stability creates risk
Investing in financial instruments in today's economy - ANSWER Is made easier by the use of mutual
funds
Which of the following is an example of a financial market? - ANSWER A local coffee house where people
regularly buy and sell financial instruments
The amount of information an individual would seek before making a financial decision - ANSWER Varies
directly with the importance of the decision
The statement "risk requires compensation" implies that people: - ANSWER Will only accept risk when
they are rewarded for doing so
Mutual Funds have - ANSWER reduced the costs associated with gathering information on stocks and
bonds
Central banks can improve the welfare of a society by doing all of the following except: - ANSWER
Serving the interest of government rather than the public at large
In the United States, control of the quantity of money is given to the: - ANSWER Federal Reserve System
Which of the following statements best describes financial instruments - ANSWER Financial instruments
can transfer resources and risk between people
, Which of the following statements best describes financial markets - ANSWER Financial markets lower
the cost and increase the speed of buying and selling financial instruments
The New York Stock Exchange is an example of: - ANSWER financial market
When an individual obtains a car loan and makes all the monthly car payments, the sum of the payments
made will exceed the purchase price of the car. This is due primarily to the core principal - ANSWER Time
has value
Most financial markets in the United States operates under a system - ANSWER With many rules and
regulation to ensure a fair market
How do financial institutions evaluate the creditworthiness of potential borrowers? - ANSWER They
gather information regarding the borrowers finances
Stock prices are determined by - ANSWER market transactions
The primary function of central banks is to: - ANSWER Control inflation and help reduce business cycle
fluctuations.
U.S. monetary policy is best described as: - ANSWER Aimed at keeping inflation low and stable and
growth high and stable
Studying money and banking through five core principles is helpful because: - ANSWER Money and
banking can undergo drastic changes overtime, but the principles do not
The largest regulatory change in U.S. Financial markets since 1930 is known as - ANSWER The Dodd-
Frank act
In 2010, regulators of many nations agreed on a major update of internationally active banks known as: -
ANSWER Basel 111
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