LOMA 308 Exam Questions Answered Correctly Latest Update 2025
Transfer payments - Answers A payment made by a govt for which no goods or services are given in
return
Intermediation - Answers The transfer of funds from savers to borrowers through the services of a
financial intermediary
Product (output) markets - Answers A market in which businesses supply finished goods and service to
households, other businesses and governments
Labor markets - Answers A market in which households offer their labor to businesses and governments
in exchange for wages or other compensation
Financial (capital) market - Answers A market in which money is transferred from savers to borrowers
Medium of exchange - Answers A standardized method of making and receiving payments for goods and
services
Unit of account - Answers The monetary unit in which value is expressed
Real GDP - Answers Gross domestic product that has been adjusted for changes in price levels
Per capita GDP - Answers Gross domestic product divided by country's population
Final goods - Answers A good that is consumed rather than a good used to produce another product
Genuine progress index index - 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 - 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 - Answers The phase in the business cycle in which unemployment is low and real GDP rises
for two or more consecutive quarters
Contraction - Answers The phase in the business cycle in which unemployment begins to rise and real
GDP decreases from an earlier quarter
Recession - 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 - 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 - Answers A variation that results from routine patterns that typically occur in the
course of one year
Cyclical variations - Answers A variation that results from changes that affects more one phase on the
business cycle over a period of several years
Random variation - Answers A variation that results from changes that are either unexpected or are one
time occurrences
Coincident indicators - Answers A statistical variable that tends to change about the same time that
gross domestic product (GDP) changes
Personal consumption expenditures - Answers A coincident indicator that contains figures on how much
money people are spending on goods and services
Prime rate - Answers the interest rate that commercial banks charge their best customers (usually large
corporations) for short-term loans
Contractual savings institutions - Answers A financial institution that acquires funds at periodic intervals
on a contractual basis
Security - 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 - Answers A pooled account, usually managed by a financial intermediary that holds the
contributions made to employer sponsored pension plans
Pension plan - Answers An arrangement under which a plan sponsor provides plan participants w a
lifetime income benefit that begins at retirement
Stocks - Answers A security that represents an ownership interest in a company
Bonds - Answers A security that represents a debt that the borrower (the issuer) owes to the bond
holder (the buyer)
Commercial paper - 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 - Answers A BD that provides investment advice and planning services in
addition to handling customer transactions
Discount broker dealer - Answers A BD that executes customer buy/sell orders but doesn't offer
investment advice
Installment credit - Answers A form of credit offered to borrowers that requires the borrower to make
payments in specified amounts for a specified period of time
Transfer payments - Answers A payment made by a govt for which no goods or services are given in
return
Intermediation - Answers The transfer of funds from savers to borrowers through the services of a
financial intermediary
Product (output) markets - Answers A market in which businesses supply finished goods and service to
households, other businesses and governments
Labor markets - Answers A market in which households offer their labor to businesses and governments
in exchange for wages or other compensation
Financial (capital) market - Answers A market in which money is transferred from savers to borrowers
Medium of exchange - Answers A standardized method of making and receiving payments for goods and
services
Unit of account - Answers The monetary unit in which value is expressed
Real GDP - Answers Gross domestic product that has been adjusted for changes in price levels
Per capita GDP - Answers Gross domestic product divided by country's population
Final goods - Answers A good that is consumed rather than a good used to produce another product
Genuine progress index index - 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 - 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 - Answers The phase in the business cycle in which unemployment is low and real GDP rises
for two or more consecutive quarters
Contraction - Answers The phase in the business cycle in which unemployment begins to rise and real
GDP decreases from an earlier quarter
Recession - 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 - 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 - Answers A variation that results from routine patterns that typically occur in the
course of one year
Cyclical variations - Answers A variation that results from changes that affects more one phase on the
business cycle over a period of several years
Random variation - Answers A variation that results from changes that are either unexpected or are one
time occurrences
Coincident indicators - Answers A statistical variable that tends to change about the same time that
gross domestic product (GDP) changes
Personal consumption expenditures - Answers A coincident indicator that contains figures on how much
money people are spending on goods and services
Prime rate - Answers the interest rate that commercial banks charge their best customers (usually large
corporations) for short-term loans
Contractual savings institutions - Answers A financial institution that acquires funds at periodic intervals
on a contractual basis
Security - 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 - Answers A pooled account, usually managed by a financial intermediary that holds the
contributions made to employer sponsored pension plans
Pension plan - Answers An arrangement under which a plan sponsor provides plan participants w a
lifetime income benefit that begins at retirement
Stocks - Answers A security that represents an ownership interest in a company
Bonds - Answers A security that represents a debt that the borrower (the issuer) owes to the bond
holder (the buyer)
Commercial paper - 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 - Answers A BD that provides investment advice and planning services in
addition to handling customer transactions
Discount broker dealer - Answers A BD that executes customer buy/sell orders but doesn't offer
investment advice
Installment credit - Answers A form of credit offered to borrowers that requires the borrower to make
payments in specified amounts for a specified period of time
