Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Spring 2014 > Finance Final > Flashcards

Finance Final Flashcards

1
Q

What is the aggregate demand curve?

A

A curve that shows the relationship between aggregate expenditure on goods and services and the price level.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is Real money balances?

A

the value of money held by households and firms, adjusted for changes in the price level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is Aggregate supply?

A

the total quantity of output, or GDP, that firms are willing to supply at a given price level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is Short-run aggregate supply (SRAS) curve?

A

a curve that shows the relationship in the short run between the price level and the quantity of aggregate output supplied by firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is Long-run aggregate supply (LRAS) curve?

A

a curve that shows the relationship in the long run between the price level and the quantity of aggregate output supplied by firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is Supply shock?

A

an unexpected change in production costs or in technology that causes the short-run aggregate supply curve to shift

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is Monetary neutrality?

A

the proposition that changes in the money supply have no effect on output in the long run

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is a Business cycle?

A

an alternating periods of economic expansion and economic recession

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a Stabilization policy?

A

a monetary policy or fiscal policy intended to reduce the severity of the business cycle and stabilize the economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the Foreign exchange market intervention?

A

a deliberate action by a central bank to influence the exchange rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are International reserves?

A

are central bank assets that are denominated in a foreign currency and used in international transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is an unsterilized foreign exchange intervention?

A

occurs when a central bank allows the monetary base to respond to the sale or purchase of domestic currency in the foreign exchange market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is sterilized foreign exchange intervention?

A

occurs when a foreign exchange intervention is accompanied by offsetting domestic open market operations, so that the monetary base is unchanged

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are Capital controls?

A

are government-imposed restrictions on foreign investors buying domestic assets or on domestic investors buying foreign assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are Exchange-rate regime?

A

a system for adjusting exchange rates and flows of goods and capital among countries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are Fixed exchange rate system?

A

a system in which exchange rates are set at levels determined and maintained by governments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is a Gold standard?

A

a fixed exchange rate system under which currencies of participating countries are convertible into an agreed-upon amount of gold.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the International Monetary Fund (IMF) ?

A

a multinational organization established by the Bretton Woods agreement to administer a system of fixed exchange rates.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is Devaluation?

A

is the lowering of the official value of a country’s currency relative to other currencies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is Revaluation?

A

the raising of the official value of a country’s currency relative to other currencies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is a Flexible exchange rate system?

A

a system in which the foreign exchange value of a currency is determined in the foreign exchange market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is Managed float regime?

A

an exchange rate system in which central banks occasionally intervene to affect foreign exchange values; also called a dirty float regime

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is the European Monetary Union?

A

1992, is the outcome of a plan drafted as part of the 1992 single European market initiative, in which exchange rates were fixed and eventually a common currency was adopted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is the euro?

A

the common currency of 16 European countries.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What is Pegging ?

A

the decision by a country to keep the exchange rate fixed between its currency and another country’s currency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

(From Quiz) On a bank’s balance sheet, ASSETS are….

A

the USES of acquired funds

You USE assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

(From Quiz) On a bank’s balance sheet, LIABILITIES are…

A

the SOURCES of acquired funds

Liabilities come from a SOURCE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

(From Quiz) Bank capital is equal to…

A

the difference between the value of the bank’s assets and the value of its liabilities

29
Q

(From Quiz) Which of the following is not a bank liability?

A

Mortgage Loans

30
Q

(From Quiz) The difference between a savings deposit and a time deposit is

A

time deposits have specified maturities

31
Q

(From Quiz) What is the current limit on deposit balances that are covered by FDIC insurance?

A

$250,000

32
Q

(From Quiz) Federal funds are

A

short-term loans between banks

33
Q

(From Quiz) Any of a bank’s reserves held at the Fed, beyond what is required are called

A

excess revenues

34
Q

(From Quiz) About what percentage of bank assets were in loans in 2012?

A

60%

35
Q

(From Quiz) The ratio of a bank’s after-tax profit to its equity or capital is known as its

A

return on capital or equity

36
Q

(From Quiz) A bank’s credit risk is the risk that

A

borrowers might default on their loans

37
Q

(From Quiz) As of 2012, about how many banks and S&Ls were there in the US?

A

7,000

38
Q

(From Quiz) The Fed’s inability to instantaneously observe chances in inflation and economic growth result in a

A

information lag

39
Q

(From Quiz) An open market purchase of securities, by the Fed

A

increases the monetary base

40
Q

(From Quiz) In order to increase its target for the federal funds rate, the Fed would normally

A

conduct open market sales of securities it owns

41
Q

(From Quiz) A falling dollar makes US Goods

A

less expensive abroad and increases the volume of US exports

42
Q

(From Quiz) Which of the following is not considered to be a goal of the Federal Reserve’s monetary policy?

A

fair wages

43
Q

(From Quiz) Members of the board of governors are appointed by…

A

the President of the US, subject of confirmation by the senate

44
Q

(From Quiz) Who owns the federal reserve banks?

A

Private commercial banks in each district that are members of the Fed Reserve System

45
Q

(From Quiz) Federal reserve districts

A

cut across state and economic boundaries

46
Q

(From Quiz) Which of the following is not included in aggregate demand?

A

Investments in treasury bonds

47
Q

(From Quiz) Currently, the world’s dominate reserve currency is the

A

US Dollar

48
Q

(From Quiz) The exchange rate system followed by the US is known as

A

a flexible exchange rate system

49
Q

(From Quiz) Which of the following statements is correct?

A

A devaluation of the British pound would lower the prices of British goods in the US

50
Q

(From Quiz) Why may a central bank intervene in the foreign exchange market when its currency is appreciating?

A

Concerns about the country’s exports becoming less competitive

51
Q

(From Quiz) How many federal reserve districts are there?

A

12

52
Q

(From Quiz) Why has the federal reserve chairman often been called the 2nd most important person in the nation?

A

because the fed is in control of monetary policy

53
Q

(From Quiz) Members of the federal reserve board of governors serve…

A

one nonrenewable 14 year term

54
Q

(From Quiz) Which of the following is a liability of the fed?

A

Currency in circulation

55
Q

(From Quiz) The British central bank is known as the

A

Bank of England

56
Q

What is Economic growth ?

A

is an increase in the economy’s output of goods and services over time.

57
Q

What are Open market operations?

A

are the Fed’s purchases and sales of securities, usually U.S. Treasury securities, in financial markets

58
Q

What is a Discount policy ?

A

is the policy tool of setting the discount rate and the terms of discount lending

59
Q

What is a Discount window?

A

the means by which the Fed makes discount loans to banks. This serves as the channel for meeting the liquidity needs of banks.

60
Q

What is the Federal funds rate?

A

the interest rate that banks charge each other on very short-term loans

61
Q

What is Monetary base?

A

the sum of bank reserves and

currency in circulation.

62
Q

What is a Discount loan?

A

a loan made by the Fed to a commercial bank

63
Q

What is the Dodd-Frank Wall Street Reform and Consumer Protection Act?

A

legislation passed during 2010 that was intended to reform regulation of the financial system

64
Q

What is the Federal Deposit Insurance Corporation (FDIC)?

A

is a federal government agency established by Congress in 1934 to insure deposits in commercial banks

65
Q

What is a Money market mutual fund?

A

a mutual fund that invests exclusively in short-term assets, such as Treasury bills, negotiable certificates of deposit, and commercial paper.

66
Q

What is a Pension fund?

A

a financial intermediary that invests contributions of workers and firms in stocks, bonds, and mortgages to provide for pension benefit payments during workers’ retirements

67
Q

Who is the current head of the federal reserve?

A

Janet Yellen

68
Q

When was the Federal Reserve created?

A

1913

Spring 2014 (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions