chapter 14

Question 1

any object generally accepted as payment for goods and services

Answer 1

money

Question 2

used to trade goods and services

Answer 2

medium of exchange

Question 3

can be used for future purchases

Answer 3

store of value

Question 4

allows measurement of the relative value of goods and services

Answer 4

unit of account

Question 5

buyers and sellers must agree on the value of money

Answer 5

the spendable money supply

Question 6

the most liquid forms of money

Answer 6

M-1 money supply

Question 7

paper money and coins issued by the Canadian Government

Answer 7

Currency

Question 8

money in chequing accounts which can be transferred to others by cheque

Answer 8

demand deposits

Question 9

an order instructing the bank to pay a given sum to a person or firm

Answer 9

cheque

Question 10

deposit requiring prior notice before withdrawal of funds

Answer 10

time deposits

Question 11

pooled assets from many investors invested in short-term, low risk financial securities

Answer 11

money market mutual funds

Question 12

saving account holdings

Answer 12

savings deposits

Question 13

privately owned, profit-oriented, financial intermediary

Answer 13

chartered banks

Question 14

major source of short-term financing

Answer 14

bank loans

Question 15

safeguard funds and estates entrusted to them

Answer 15

trust companies

Question 16

cooperative savings and lending institutions formed by a group of individuals with common interests

Answer 16

credit unions

Question 17

company that shares risks with policy holders for payment of premiums

Answer 17

life insurance companies

Question 18

buy uncollected accounts receivables from a firm for less than face value

Answer 18

factoring companies

Question 19

finances instalment purchases made by individuals or businesses

Answer 19

sales finance company

Question 20

makes personal loans to consumers

Answer 20

consumer finance company

Question 21

fund new or expanding firms that have great potential

Answer 21

venture capital firms

Question 22

accumulate cash that will be paid out to subscribers in the future in the form of pension income

Answer 22

pension funds

Question 23

stockbrockers or underwriters are the primary distributors of new stock and bond issues

Answer 23

investment dealers

Question 24

influence the willingness to invest abroad and buy impor

Answer 24

exchange rates and international trade

Question 25

identical products should sell for the same price in all countries

Answer 25

the law of one price

Question 26

illustrates the concept of over and undervalued currencies

Answer 26

the big mac currency index

Question 27

international banking is governed by a network of loose agreements between countries

Answer 27

international bank structure

Question 28

UN agency that funds infrastructure projects in developing countries

Answer 28

World Bank

Question 29

collects money from member nations and lends it to others

Answer 29

International Monetary Fund