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Economics > Unit 4 > Flashcards

Unit 4 Flashcards

1
Q

In the 1990s the Russian people lost confidence in the value of rubble and many were no longer willing to sell goods and services in exchange for Russian currency which characteristic of money did the Russian currency luck

A

Except ability

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2
Q

Saving bonds different from most other barns in that

A

The buyer does not receive periodic interest payments in exchange for a lower purchase price

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3
Q

You realize that many students who come to early-morning hockey practice do not get up early enough to eat breakfast you borrow $500 from your parents to start a bagel delivery service to the hockey rink in the early mornings you were acting as

A

An entrepreneur

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4
Q

You are a financial advisor his client wants start that he’s regular dividends you advise them to buy

A

Income stock

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5
Q

Which the following is an example of representative money

A

An IOU note

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6
Q

You need a new computer and you will need a loan in order to buy one which lender is most likely to charge you the highest interest rate on your loan

A

Finance company

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7
Q

Maria makes a deposit of $10,000 into a small town think savings account small-town bank wants 20% of her deposit then lens the remaining 8000 to bend to buy new car this practice of retaining only a portion of deposits on hand is called

A

Fractional reserve banking

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8
Q

You do not have to pay state taxes on the interest earned on

A

Treasury bills

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9
Q

If a bond from the franchise greens galore has a coupon rate of 5% of hard value of $2000 and will mature in five years how much will the company of paid to hold her when he retires its debts

A

$500 plus the original investment of $2000

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10
Q

Which of the following is an example of a barter system

A

Instead of paying rent you clean the house for the owner

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11
Q

What is the largest source of income for banks

A

Interest they receive from loans

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12
Q

How did the United States government make the American public has confidence in the nations currency in the 1870s

A

The government adopted the gold standard

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13
Q

In example of equity is

A

a share stock

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14
Q

Your neighbor asks you to invest $500 and a 5% interest in the catering business she insists that with all of thatwith all of the working parents in the neighborhood a business that provides home cook meals has the potential for making huge profits. You want to invest their concern because your neighbor has not had any business experience how can you offset your risk

A

Ask for a higher interest rate

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15
Q

What is a mortgage used to purchase

A

Real estate

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16
Q

Penny is an artist and John is a carpenter and he raced to paint a portrait of John’s family in exchange for a handmade table created by John how did Penny and John pay for goods in the transaction

A

Through bartering

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17
Q

The maid advantage of diversification in investment policy is that it

A

Reduces risk to investors

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18
Q

The most trades are made

A

On the OTC market

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19
Q

The great cash can be attributed to all of the following reasons except

A

The small number of people buying stock on margin

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20
Q

Which of the following is an example of money as a unit of account

A

Checking the price of a camera at several stores before buying it at the lowest price

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21
Q

Which of the following was not because of the savings and loan crisis of the 1980s

A

The gold reserves act

22
Q

You decide to open a savings account and noticed a sign in your bank that indicates deposits are FDIC insured what protection does that give you

A

If the bank feels your deposits are protected up to $100,000

23
Q

An example of blue-chip stocks might be

A

A large well-known company traded on the NYS E

24
Q

Since bonds are considered among the safest investment you’d expect that they would

A

Have low interest rates

25
Q

What condition is necessary for a Fiat money system to work

A

The government must control the money supply

26
Q

What is representative money more useful than commodity money

A

Representative money is portable durable divisible an acceptable they can also be exchange for something else of value

27
Q

To finance the building of a new police station a local government is most likely to issue

A

A municipal bond

28
Q

In June Leslie when’s a cash prize of $2000 she plans to use this money to pay her tuition bill in September Leslie put his money in a savings account because your main priority is

A

Lick quit did T liquidity since she’ll need to use the money in the short term

29
Q

Your financial advisor his client is concerned about losing his investment if the company goes out of business advising to buy

A

Preferred stock

30
Q

What did the Federalist believe about banking

A

They believe that a centralized banking system was necessary

31
Q

Near money includes

A

Deposit into savings account and money market mutual funds

32
Q

Aaron borrowed $18,000 to buy a car her loan will be paid off in five years by the time she pays off the loan she will have made $20,000 in payments why did she have to pay $2000 in payments why did she have to pay $2000 more than the price of the car

A

She had to be interest of two dozen dollars for the privilege of borrowing the principle of $18,000

33
Q

All the following are low risk investments except

A

Junk bonds

34
Q

Your friend George has just inherited $1000 and would like to invest the money in the stock market you suggest that he

A

Contact a brokerage firm who will put him in touch with the stockbroker

35
Q

What happens when you make a purchase using a credit card

A

The credit card issuer pays the store

36
Q

American leaders in the early United States wanted to establish a stable banking system in order to

A

Promote international trade and economic growth

37
Q

Investing in a money market mutual fund is a higher risk than investing in a certificate of deposit because unlike CDs money market funds

A

Are not insured by the FDIC

38
Q

Against your better judgment you win $100 to your cousin who has a reputation for failing to pay back loans you’re taking

A

A credit risk

39
Q

You hear on the news that the Dow has fallen just below 8000 points this means that

A

The Dow is relatively high levels compared to the early 1980s but short of its all time high

40
Q

What are greenbacks

A

Commodity money used by the union during the Civil War

41
Q

When you pay for a new CD with the debit card do you authorize the transfer of money from your account to the music stores account in other words a payment by debit card is the electronic oh form of a payment by

A

Check

42
Q

All the following are examples of financial intermediaries except

A

A stock certificate

43
Q

A stock split is most likely to occur when

A

The price of the stock becomes too high

44
Q

Karen wants to buy stock but is worried about the current “bear market” this means that

A

Many investors are selling their stocks in anticipation of lower profits

45
Q

Which of the following is the main disadvantage of using shells as money instead of coins

A

Uniformity

46
Q

Which of the following is not an example of M1 money

A

A mutual fund

47
Q

How did the high rates affect Savings and Loan’s (S&L’s) in the 1980s

A

S&L’s Lost money because they had to pay high interest on current deposits received below returns from low interest loans they had made in the 1970s

48
Q

When you invest in a mutual fund

A

Your money is invested in a variety of stocks and bonds

49
Q

Why would a person invest in junk bonds

A

He does not know anything about investment

50
Q

Which of the following is not an example of a liquid asset

A

A certificate of deposit

Economics (6 decks)

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