WEEK 4

Question 1

trading one good or service for another.

Answer 1

Barter

Question 2

which means a
situation where two people each want some good or service that the other person can provide.

Answer 2

Double Coincidence of Wants

Question 3

consists of objects that have value in themselves as well as value in their
use as money.

Answer 3

Commodity Money

Question 4

is a legal tender whose value is backed by the government that issued it.(ex: Paper
bills, and coins)

Answer 4

Fiat Money

Question 5

generally refers to means of accessing financial services and conducting
transactions on a mobile device.

Answer 5

Mobile Payment

Question 6

M1 Money Supply

Answer 6

Coins and currency in circulation
Demand deposits

Question 7

M2 Money Supply

Answer 7

Saving Deposits
Money Market Funds
Certificates of Deposit / Time Deposits

Question 8

between savers and borrowers and direct the flow of funds between the two groups.

Answer 8

Financial Intermediaries

Question 9

economic resources.

Answer 9

Financial Capital

Question 10

Four main ways that businesses raise financial capital:

Answer 10

• Early-stage Capital
• Profits
• Bonds
• Stocks

Question 11

is when a business owner uses his/her own money or seeks money from an angel investor or venture capital firm to get a business started.

Answer 11

Early-Stage Capital

Question 12

If a firm’s revenues are greater than costs and they are earning profits,

Answer 12

Profits

Question 14

is issued by firms, but bonds are also issued by various levels of government.

Answer 14

Corporate Bond

Question 14

Anyone who owns a bond and receives the interest payments is called a _____.

Answer 14

Bondholder

Question 14

is a financial contract: the borrower agrees to repay the amount that was borrowed and
also a rate of interest over a period of time in the future.

Answer 14

Bond

Question 15

are a way to raise capital by selling ownership or equity; an investment for
shareholders that creates return through the distribution of corporate profits as dividends or
through gains in corporate value; traded on stock exchanges through member brokers.

Answer 15

Stocks

Question 16

has the right to vote and attend general meeting

Answer 16

Common Stock

Question 17

Priority to get the dividend

Answer 17

Preferred Stock

Question 18

The firm can make a direct payment to its shareholders called a _____.

Answer 18

Dividend

Question 19

a financial investor might buy a share of stock and then later sell it for a higher
price – the increase in value of the stock between when it is bought and when it is sold is called _____.

Answer 19

Capital Gain

Question 20

is owned by the people who run it on a day-to-day basis.

Answer 20

Private Company

Question 21

When a firm decides to sell stock, which in turn can be bought and sold by financial investors, it
is called a _______.

Answer 21

Public Company