CH3. ECON & FS Flashcards
The Pizza Company faces a demand for its pizzas which obeys the “law of demand.” If the owner lowers the price she charges per pizza, the number of pizzas sold would:
(a) rise as would her total revenues
(b) rise, but her total revenues would fall
(c) rise, while her total revenues could rise, fall, or even stay the same
(d) fall as would her total revenues
(e) fall, while her total revenues could rise, fall, or even stay the same
(c) rise, while her total revenues could rise, fall, or even stay the same
The money supply in the Philippines is controlled by:
(a) The commercial banking industry
(b) Congress (the committee on Banking and Finance)
(c) Bureau of Treasury
(d) Bangko Sentral Ng Pilipinas
(e) The Philippine Dealing Exchange
(d) Bangko Sentral Ng Pilipinas
Which of the following financial statements presents information about a business at a point in time?
(a) Balance Sheet
(b) Income statement
(c) Statement of cash flows
(d) Statement of retained earnings
(a) Balance Sheet
The prices of most goods and services keep going up, what is this called?
(a) Income
(b) Credit
(c) Surplus
(d) Inflation
(e) None of the above
(d) Inflation
To finance a budget deficit, the government can borrow money from:
(a) a central bank
(b) corporations
(c) individuals
(d) foreign entities
(e) all of the above
(e) all of the above
Which of the following statements are true?
I. inflation increases the purchasing power of money
II. deflations reduces the purchasing power of money
III. inflation reduces the purchasing power of money
IV. deflation increases the purchasing power of money
(a) IandII
(b) IandIV
(c) II and III
(d) III and IV
(e) II only
(d) III and IV
When the economy starts ti overheat, i.e. overproduction and excessive buildup in inventory, this is known as the _________cycle
(a) expansion
(b) recession
(c) peak
(d) through
(c) peak
The amount paid by the stockholders in excess of par value is called:
(a) retained earnings
(b) capital stock
(c) capital surplus
(d) liabilities
(e) none of the above
(c) capital surplus
If one wants to know the operating performance of a Corporation for a particular period, the most relevant statement to look at is the:
(a) Cashflow statement
(b) Income statement
(c) Balance Sheet
(d) Statement of Retained Earnings
(e) None of the above
(b) Income statement
The interest rate of a country is predominantly controlled by the:
(a) Department of Finance
(b) The Bureau of Internal Revenue
(c) The Central Bank
(d) The Bureau of Treasury
(e) All of the above
(c) The Central Bank
If the reserve requirement in the Philippines is 20%, what is the potential money deposit expansion multiplier?
(a) 120
(b) 40
(c) 5
(d) 20
(e) 100
(c) 5
The BSP unexpectedly raises the overnight borrowing rate. In the short run, the market will expect:
(a) Prices of Government securities to go up
(b) Inflation will increase
(c) Loans will increase
(d) Prices of Corporate bonds to go down
(e) None of the above
(d) Prices of Corporate bonds to go down
If reserve requirements are 10% how much must a bank be required to keep on reserve if it has Php 2,000,000,000 of deposits and php 1,500,000,000 of loans?
(a) Php 200,000,000
(b) Php 100,000,000
(c) Php 20,000,000
(d) Nil
(e) Php 10,000,000
(a) Php 200,000,000
How does the Federal Reserve tighten the money supply?
(a) Selling government securities
(b) Increasing the discount rate
(c) Increasing reserve requirements
(d) All of the above
(d) All of the above
What is stock held for future use?
(a) Authorized stock
(b) Un-issued stock
(c) Issued stock
(d) Outstanding stock
(e) None of the above
(b) Un-issued stock
