LOMA 308 || QUESTIONS WITH COMPLETE
SOLUTIONS!!
Transfer payments correct answers A payment made by a govt for which no goods or services
are given in return
Intermediation correct answers The transfer of funds from savers to borrowers through the
services of a financial intermediary
Product (output) markets correct answers A market in which businesses supply finished
goods and service to households, other businesses and governments
Labor markets correct answers A market in which households offer their labor to businesses
and governments in exchange for wages or other compensation
Financial (capital) market correct answers A market in which money is transferred from
savers to borrowers
Medium of exchange correct answers A standardized method of making and receiving
payments for goods and services
Unit of account correct answers The monetary unit in which value is expressed
Real GDP correct answers Gross domestic product that has been adjusted for changes in price
levels
Per capita GDP correct answers Gross domestic product divided by country's population
Final goods correct answers A good that is consumed rather than a good used to produce
another product
Genuine progress index index correct answers A measure of a country's progress and
wellbeing determined by incorporating environmental and social factors that aren't measured
by the country's gross domestic product (GDP)
Natural rate of unemployment correct answers The level of unemployment caused by people
leaving the workforce because their skills are no longer needed or they are looking for other
jobs and not by a recession or other drop in economic activity. In the US, it is believed to be
~5%
Expansion correct answers The phase in the business cycle in which unemployment is low
and real GDP rises for two or more consecutive quarters
Contraction correct answers The phase in the business cycle in which unemployment begins
to rise and real GDP decreases from an earlier quarter
Recession correct answers A significant decline in economic activity spread across the
economy and lasting more than a few months. Unemployment is generally high and real GDP
usually falls for two or more quarters
, Depression correct answers A severe and prolonged downturn in economic activity
characterized by substantial increases in unemployment and significant decreases in real GDP
and available credit
Seasonal variation correct answers A variation that results from routine patterns that typically
occur in the course of one year
Cyclical variations correct answers A variation that results from changes that affects more
one phase on the business cycle over a period of several years
Random variation correct answers A variation that results from changes that are either
unexpected or are one time occurrences
Coincident indicators correct answers A statistical variable that tends to change about the
same time that gross domestic product (GDP) changes
Personal consumption expenditures correct answers A coincident indicator that contains
figures on how much money people are spending on goods and services
Prime rate correct answers the interest rate that commercial banks charge their best customers
(usually large corporations) for short-term loans
Contractual savings institutions correct answers A financial institution that acquires funds at
periodic intervals on a contractual basis
Security correct answers A document or certificate that represents an ownership interest in a
business (stock) or an obligation of indebtedness owner by a business, government, or agency
(bond)
Pension funds correct answers A pooled account, usually managed by a financial
intermediary that holds the contributions made to employer sponsored pension plans
Pension plan correct answers An arrangement under which a plan sponsor provides plan
participants w a lifetime income benefit that begins at retirement
Stocks correct answers A security that represents an ownership interest in a company
Bonds correct answers A security that represents a debt that the borrower (the issuer) owes to
the bond holder (the buyer)
Commercial paper correct answers A financial instrument that consists of short term,
unsecured promissory notes issued to businesses or govts by corporations as an alternative to
short term bank loans
Full service broker dealer correct answers A BD that provides investment advice and
planning services in addition to handling customer transactions
Discount broker dealer correct answers A BD that executes customer buy/sell orders but
doesn't offer investment advice
SOLUTIONS!!
Transfer payments correct answers A payment made by a govt for which no goods or services
are given in return
Intermediation correct answers The transfer of funds from savers to borrowers through the
services of a financial intermediary
Product (output) markets correct answers A market in which businesses supply finished
goods and service to households, other businesses and governments
Labor markets correct answers A market in which households offer their labor to businesses
and governments in exchange for wages or other compensation
Financial (capital) market correct answers A market in which money is transferred from
savers to borrowers
Medium of exchange correct answers A standardized method of making and receiving
payments for goods and services
Unit of account correct answers The monetary unit in which value is expressed
Real GDP correct answers Gross domestic product that has been adjusted for changes in price
levels
Per capita GDP correct answers Gross domestic product divided by country's population
Final goods correct answers A good that is consumed rather than a good used to produce
another product
Genuine progress index index correct answers A measure of a country's progress and
wellbeing determined by incorporating environmental and social factors that aren't measured
by the country's gross domestic product (GDP)
Natural rate of unemployment correct answers The level of unemployment caused by people
leaving the workforce because their skills are no longer needed or they are looking for other
jobs and not by a recession or other drop in economic activity. In the US, it is believed to be
~5%
Expansion correct answers The phase in the business cycle in which unemployment is low
and real GDP rises for two or more consecutive quarters
Contraction correct answers The phase in the business cycle in which unemployment begins
to rise and real GDP decreases from an earlier quarter
Recession correct answers A significant decline in economic activity spread across the
economy and lasting more than a few months. Unemployment is generally high and real GDP
usually falls for two or more quarters
, Depression correct answers A severe and prolonged downturn in economic activity
characterized by substantial increases in unemployment and significant decreases in real GDP
and available credit
Seasonal variation correct answers A variation that results from routine patterns that typically
occur in the course of one year
Cyclical variations correct answers A variation that results from changes that affects more
one phase on the business cycle over a period of several years
Random variation correct answers A variation that results from changes that are either
unexpected or are one time occurrences
Coincident indicators correct answers A statistical variable that tends to change about the
same time that gross domestic product (GDP) changes
Personal consumption expenditures correct answers A coincident indicator that contains
figures on how much money people are spending on goods and services
Prime rate correct answers the interest rate that commercial banks charge their best customers
(usually large corporations) for short-term loans
Contractual savings institutions correct answers A financial institution that acquires funds at
periodic intervals on a contractual basis
Security correct answers A document or certificate that represents an ownership interest in a
business (stock) or an obligation of indebtedness owner by a business, government, or agency
(bond)
Pension funds correct answers A pooled account, usually managed by a financial
intermediary that holds the contributions made to employer sponsored pension plans
Pension plan correct answers An arrangement under which a plan sponsor provides plan
participants w a lifetime income benefit that begins at retirement
Stocks correct answers A security that represents an ownership interest in a company
Bonds correct answers A security that represents a debt that the borrower (the issuer) owes to
the bond holder (the buyer)
Commercial paper correct answers A financial instrument that consists of short term,
unsecured promissory notes issued to businesses or govts by corporations as an alternative to
short term bank loans
Full service broker dealer correct answers A BD that provides investment advice and
planning services in addition to handling customer transactions
Discount broker dealer correct answers A BD that executes customer buy/sell orders but
doesn't offer investment advice
