ECO 305 STUDY SET WITH COMPLETE SOLUTIONS
Financial markets have the basic function of - ANSWER getting people with funds to
lend together with people who want to borrow funds.
Which of the following can be described as direct finance? - ANSWER You borrow
$2,500 from a friend.
Which of the following statements about the characteristics of debt and equities is
TRUE? - ANSWER They can both be long-term financial instruments.
When I purchase ________, I own a portion of a firm and have the right to vote on issues
important to the firm and to elect its directors. - ANSWER stock
A short-term debt instrument issued by well-known corporations is called - ANSWER
commercial paper
Bonds that are sold in a foreign country and are denominated in the country's currency
in which they are sold are known as - ANSWER foreign bonds
Bonds that are sold in a foreign country and are denominated in a currency other than
that of the country in which it is sold are known as - ANSWER eurobonds
The process of indirect finance using financial intermediaries is called - ANSWER
financial intermediation
Which of the following is a depository institution? - ANSWER a credit union
Which of the following is NOT a goal of financial regulation? - ANSWER ensuring that
, investors never suffer losses
To an economist, ________ is anything that is generally accepted in payment for goods or
services or in the repayment of debt. - ANSWER money
The total collection of pieces of property that serve to store value is a person's -
ANSWER wealth
An individual's annual salary is her - ANSWER income
All of the following are necessary criteria for a commodity to function as money EXCEPT
- ANSWER it must deteriorate quickly.
If peanuts serve as a medium of exchange, a unit of account, and a store of value, then
peanuts are - ANSWER money
The conversion of a barter economy to one that uses money - ANSWER increases
efficiency by reducing transactions costs.
the payments system is - ANSWER the method of conducting transactions in the
economy.
________ money could be used for some other purpose other than as a medium of
exchange, for example, gold coins could be melted down and turned into gold jewelry. -
ANSWER commodity
Monetary aggregates are - ANSWER measures of the money supply reported by the
Federal Reserve.
The currency component includes paper money and coins held in - ANSWER the hands
of the nonbank public.
Financial markets have the basic function of - ANSWER getting people with funds to
lend together with people who want to borrow funds.
Which of the following can be described as direct finance? - ANSWER You borrow
$2,500 from a friend.
Which of the following statements about the characteristics of debt and equities is
TRUE? - ANSWER They can both be long-term financial instruments.
When I purchase ________, I own a portion of a firm and have the right to vote on issues
important to the firm and to elect its directors. - ANSWER stock
A short-term debt instrument issued by well-known corporations is called - ANSWER
commercial paper
Bonds that are sold in a foreign country and are denominated in the country's currency
in which they are sold are known as - ANSWER foreign bonds
Bonds that are sold in a foreign country and are denominated in a currency other than
that of the country in which it is sold are known as - ANSWER eurobonds
The process of indirect finance using financial intermediaries is called - ANSWER
financial intermediation
Which of the following is a depository institution? - ANSWER a credit union
Which of the following is NOT a goal of financial regulation? - ANSWER ensuring that
, investors never suffer losses
To an economist, ________ is anything that is generally accepted in payment for goods or
services or in the repayment of debt. - ANSWER money
The total collection of pieces of property that serve to store value is a person's -
ANSWER wealth
An individual's annual salary is her - ANSWER income
All of the following are necessary criteria for a commodity to function as money EXCEPT
- ANSWER it must deteriorate quickly.
If peanuts serve as a medium of exchange, a unit of account, and a store of value, then
peanuts are - ANSWER money
The conversion of a barter economy to one that uses money - ANSWER increases
efficiency by reducing transactions costs.
the payments system is - ANSWER the method of conducting transactions in the
economy.
________ money could be used for some other purpose other than as a medium of
exchange, for example, gold coins could be melted down and turned into gold jewelry. -
ANSWER commodity
Monetary aggregates are - ANSWER measures of the money supply reported by the
Federal Reserve.
The currency component includes paper money and coins held in - ANSWER the hands
of the nonbank public.
