Chapter 19 - Economic Factors Flashcards

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1
Q

What is the effect of raising the minimum reserve requirement?

A

Decreases the money supply and tightens credit.

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2
Q

For collateralized loans they make to broker-dealers (for margin purposes), commercial banks charge the _____ rate.

A

call

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3
Q

The Federal Reserve Board will _____ securities to increase the money supply and ease credit.

A

buy

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4
Q

Economic theory stating that government intervention in the economy is necessary for sustained economic growth.

A

Keynesian

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5
Q

The rate of interest banks charge each other on overnight loans.

A

The fed funds rate

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6
Q

The rate that banks charge their most creditworthy corporate clients.

A

Prime Rate

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7
Q

Stocks of companies that have sales and earnings growing faster than the overall economy.

A

Growth stocks

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8
Q

During periods of easy money when interest rates are declining, yield curves tend to:

A

slope upward from the shorter to the longer maturities

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9
Q

Money received by a corporation when it sells its stock above its par value is called:

A

Paid-in capital

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10
Q

During which phase of the business cycle will an investor experience a decrease in purchasing power?

A

Peak

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11
Q
Which of the following choices is NOT a leading economic indicator?
A) Building permits
B) Consumer expectations
C) Prime rate
D) Stock Prices
A

Prime rate

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