Money & Banking Final from practice test and actual exams

Money & Banking Final from practice test and actual exams A rising stock market index due to higher share prices a. decreases people's wealth, but is unlikely to increase their willingness to spend b. increases people's wealth and as a result may increase their willingness to spend c. decreases the amount of funds that business firms can raise by selling newlyissued stock d. increases people's wealth, but is unlikely to increase their willingness to spend - CORRECT ANSWER b. increases people's wealth and as a result may increase their willingness to spend Money is defined as a. a risk-free repository of spending power b. bills of exchange c. anything that is generally accepted in payment for goods and services or in the repayment of debt d. the unrecognized liability of governments - CORRECT ANSWER c. anything that is generally accepted in payment for goods and services or in the repayment of debt Evidence from business cycle fluctuations in the United States indicates that a. recessions have been preceded by declines in share prices on the stock