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ECO 4223 Test 1 Questions and Correct Answers | Latest Update

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A bond pays its ________ at the time of ________ .  face value; maturity Corporations issue stocks to  raise funds for investments Economists call the situation where one side of an economic transaction has more information than the other  asymmetric information The problem of mora...

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  • October 4, 2024
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  • 2024/2025
  • Exam (elaborations)
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Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025


ECO 4223 Test 1 Questions and Correct
Answers | Latest Update
A bond pays its ________ at the time of ________ .


 face value; maturity




Corporations issue stocks to


 raise funds for investments




Economists call the situation where one side of an economic transaction has more information

than the other


 asymmetric information




The problem of moral hazard arises when the seller of a security has


 little incentive to behave prudently after selling its security




Financial markets are made up of people and firms that ________ assets.


 buy and sell




Money serves an economy as a




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, Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025

 medium of exchange

unit of account


store of value




If the price of a guitar is 200 boxes of cereal in Kirk's Store and in Jimmy's Store the exact

same guitar can be purchased for 100 CDs, what is the price of one CD in terms of cereal?


 two boxes




M1 equals


 currency + checking deposits + traveler's checks




Money demand is:


 the amount of wealth a person chooses to hold as money




Reindeer were once used as money in Finland. Using reindeer as money is an example of:


 commodity money.




If firms believe the economy will begin to pick up in the future, the ________ of(for) loanable

funds will shift from ________ and the real interest rate will ________.




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