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ECO 4223 Midterm exam solutions latest 2024.
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ECO 4223 Midterm exam solutions latest 2024.
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ECO 4223 Midterm exam solutions latest2024
Identify which item is not apart of the six parts of the financial system - ANS Credit
cards
The central bank of the United States is - ANS Federal Reserve System
Identify which of the following is not one of the five core principles of money and
banking - ANS Stability creates risk
Investing in financial instruments in today's economy - ANS Is made easier by the use
of mutual funds
Which of the following is an example of a financial market? - ANS 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
- ANS Varies directly with the importance of the decision
The statement "risk requires compensation" implies that people: - ANS Will only accept
risk when they are rewarded for doing so
Mutual Funds have - ANS 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:
- ANS 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: - ANS Federal
Reserve System
Which of the following statements best describes financial instruments - ANS Financial
instruments can transfer resources and risk between people
Which of the following statements best describes financial markets - ANS Financial
markets lower the cost and increase the speed of buying and selling financial
instruments
The New York Stock Exchange is an example of: - ANS 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 - ANS Time has value
Most financial markets in the United States operates under a system - ANS With many
rules and regulation to ensure a fair market
How do financial institutions evaluate the creditworthiness of potential borrowers? -
ANS They gather information regarding the borrowers finances
Stock prices are determined by - ANS market transactions
The primary function of central banks is to: - ANS Control inflation and help reduce
business cycle fluctuations.
U.S. monetary policy is best described as: - ANS Aimed at keeping inflation low and
stable and growth high and stable
Studying money and banking through five core principles is helpful because: - ANS
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 - ANS
The Dodd-Frank act
In 2010, regulators of many nations agreed on a major update of internationally active
banks known as: - ANS Basel 111
Which of the following would not be considered a characteristic of money? - ANS It
must have intrinsic value
A society without any money: - ANS Would have to rely strictly on barter.
The use of money makes us more efficient because: - ANS people can specialize in
what they do well
The unit of account characteristic of money: - ANS means all prices are expressed in
terms of money
Without the use of money, workers in economy would: - ANS Probably specialize less
As an economy produces more different types of goods: - ANS It is more difficult to
quote prices if the economy does not use money
The store of value characteristic of money refers to the fact that: - ANS Money allows
people to shift purchasing power into the future.
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