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Question 1 of 20
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5.0 Points
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Jill Clinton puts $1,000 in a savings
passbook that pays 4% compounded quarterly. How much will she have in her
account after five years?
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A.$1,200.50
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B.$1,220.20
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C.$1,174.80
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D.$1,217.50
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Question 2 of 20
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5.0 Points
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An increase in inflation should:
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A.increase the demand for loanable funds
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B.decrease the interest rate on loans
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C.increase the interest rate on loans
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D.none of the above
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Question 3 of 20
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5.0 Points
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Economists use a ___________________
framework to explain how the prices and quantities of goods and services are determined
in a free-market economic system.
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A.opportunity
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B.marginal cost
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C.supply-and-demand
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D.anti-monopoly
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E.none of the above
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Question 4 of 20
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5.0 Points
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The future value of $100 received today and
deposited at 6 percent for four years is
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A.$126.
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B.$ 79.
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C.$124.
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D.$116.
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Question 5 of 20
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5.0 Points
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All of the following are important
components of a financial system except:
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A.government and private policy makers
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B.a monetary system
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C.the international monetary fund
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D.financial institutions and markets
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Question 6 of 20
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5.0 Points
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In general, the effective rate of interest
on a discount loan
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A.is lower than that on standard loan
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B.is higher than that on a standard loan
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C.is identical to that on a standard loan
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D.none of the above
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Question 7 of 20
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5.0 Points
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Because of the financial crisis that began
in 2008, by the end of 2009:
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A.unemployment was in excess of 10 percent
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B.many homeowners owed more money on their mortgage
loans than the their homes were worth
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C.home mortgage foreclosure rates and personal and
business bankruptcies were increasing
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D.over 100 banks in the U.S. had already failed with
over 500 more being considered financially weak
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E.all of the above are true
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Question 8 of 20
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5.0 Points
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Which of the following statements about
greenbacks is false?
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A.Greenbackswere money issued by the U.S. government to
help finance the Civil War.
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B.Greenbackswere fiat money.
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C.Greenbackswere not redeemable for gold or silver.
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D.All of the above statements are correct.
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Question 9 of 20
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5.0 Points
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____________ is anything generally accepted
as a means of paying for goods and services and for paying off debts. It must
be easily divisible, so that exchanges can take place in small or large
quantities; relatively inexpensive to store and transfer; and reasonably
stable in value over time.
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A.A financial asset
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B.A real asset
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C.money
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D.all of the above
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E.none of the above
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Question 10 of 20
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5.0 Points
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List the five major capital market
securities described in the chapter 7.
The five major capital market securities are
mortgages, treasury bonds, municipal bonds, corporate bonds, and corporate stocks
(Melicher, 2014). Ronald W. Melicher, E. A. (2014). Introduction to Finance:
Custom Edition Select Chapters, Fifteenth Edition. Danvers: John Wiley &
Sons.
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Feedback: The five major capital market securities:
• Mortgage: loan backed by real property in the form of buildings and
houses.
• Treasury bond: long-term debt instrument issued by the U.S. federal
government.
• Municipal bond: long-term debt instrument issued by a state or local
government.
• Corporate bond: debt instrument issued by a corporation to raise
long-term funds.
• Common stock: security that indicates ownership interest in a
corporation.
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Question 11 of 20
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5.0 Points
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Which of the following is not an asset of
depository institutions?
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A.cash
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B.unsecured loans
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C.time deposits
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D.U.S. government securities
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Question 12 of 20
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5.0 Points
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Identify and describe the factors, in
addition to supply and demand, that determine interest rates.
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Question 13 of 20
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5.0 Points
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You need $8,000 four years from now for a
down payment on your future house. How much money must you deposit today if
your credit union pays 5% interest compounded annually? Pick the closest
answer.
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A.$6,269.59
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B.$6,578.95
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C.$6,394.12
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D.$6,189.83
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Question 14 of 20
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5.0 Points
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When investors expect __________ inflation
rates they will require __________ nominal interest rates so that a real rate
of return will remain after the inflation.
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A.higher, higher
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B.higher, lower
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C.lower, higher
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D.none of the above
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Question 15 of 20
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5.0 Points
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The major factor that determines the volume
of savings, corporate as well as individual, is the:
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A.volume of spending
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B.level of national income
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C.amount of private pension plans
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D.amount of life insurance policies
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Question 16 of 20
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5.0 Points
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Your college has agreed to give you a
$10,000 tuition loan. As part of the agreement, you must repay $12,600 at the
end of the three-year period. What interest rate is the college charging?
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Question 17 of 20
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5.0 Points
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Identify the objectives of the national
economic policy.
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Question 18 of 20
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5.0 Points
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The three functions of money are:
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A.medium of exchange, store of value, and measure of
liquidity
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B.conduit for international trade, store of value, and
standard of value
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C.medium of exchange, store of value, and standard of
value
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D.inflation hedge, measure of liquidity, and medium of
exchange
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Question 19 of 20
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5.0 Points
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$1,000 invested today at 6% interest would
be worth ________ one year from now
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A.$1,600
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B.$1,060
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C.$1,160
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D.$1,006
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E.none of the above
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Question 20 of 20
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5.0 Points
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If the money supply and total demand
increase faster than output, prices will:
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A.fall
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B.stay the same
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C.rise
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D.reflect lower inflation
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