question

MAP Using information on the flowchart, which group makes decisions about the growth of the money supply and the level of interest rates

answer

The Federal open market committee

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MAP Chicago district is represented by which number on the map

answer

7

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MAP The information shown in the graft on the personal saving rates indicates that

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As the wealth of Americans increased the rate of personal savings decreased

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MAP Your grandparents obtained a mortgage on a house at some point between 1972 and 2004. According to the graph what would have been the worst possible year for them to have obtained a loan to buy a house during those decades

answer

1981

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MAP US currency is part of

answer

M1 M2 and M3

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Money is useful to people because it is

answer

A medium of exchange

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Gold, olive oil and cattle even beer have been used as money. This type of money is

answer

Commodity money

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The paper currency in the United States has value because

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The federal government says it has value

question

The first bank of the United States was

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The first national bank of the United States government

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When was the Federal Reserve system established

answer

1913

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Following the great depression, the Federal Reserve

answer

Imposed restrictions on the interest rate that banks could pay depositors

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Federal Reserve system is in charge of

answer

monetary policy

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Which of the following banking activities was prohibited to commercial banks by the glass Steagall act of 1933

answer

Underwriting stocks

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Credit risk is the risk that the borrower will not

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Repay all the money owed

question

financial intermediary

answer

Facilitates the transfer of funds from savers to borrowers

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Companies raise funds to expand their business by

answer

All of the above

question

Liquidity risk is

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The chance that investors will not be able to turn investments back into cash quickly enough to meet their financial needs

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The government of the United States borrows most of the money it needs by

answer

Selling treasury bills and treasury bonds

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Inflation risk is the prospect of

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Inflation reducing the value of investors financial assets

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Yield to maturity is

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The annual return on a bond held to maturity

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Credit unions

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Are fairly small and specialize in home mortgages and car loans

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Finance companies

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Make loans to consumers

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The Federal deposit insurance Corporation

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Insures customer deposits if I think fails

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M1

answer

Represents money that people have easy and immediate access to

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A prospectus

answer

Provides potential investors with information on performance of mutual fund portfolio's

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Many markets are markets where

answer

Securities with less than a year to maturity are traded

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Capital markets are markets where

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Securities with more than a year to maturity are traded

question

Diversification is an investment strategy to

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Reduce risk by spreading investments among several assets

question

For countries money loses its function as a store of value

answer

All of the above???

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The expiration of the charter of the first bank of the United States in 1811 resulted in

answer

Currencies that lost value

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The panic of 1907 was caused by

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The continuing problems with the nations banking system because state charter banks did not have enough gold to exchange for the paper money they issued

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Which of the following factors worsen the effects of the Great Depression in 1933

answer

Massive bank failures

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The Glass-Steagall act passed by Congress in 1933

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Prohibited commercial banks from underwriting stocks and bonds

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An investor will purchase bonds that are rated AAA because they

answer

Very low risk debt securities

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Thanks make a profit by

answer

All of the above

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The late 1980s savings and loan crisis resulted primarily from

answer

Regulation in a high interest-rate environment

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The repeal of the glass Steagall act by Congress in 1999

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Paved the way for banks to sell financial assets such as stocks and bonds

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John wants to invest his savings and highly liquid investments. Which of the following financial assets serve this financial goal

answer

Money market funds

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Jamaal wants to die versify his investments. Which of the following investments should Jamall invest in to best serve his financial goal

answer

A portfolio of stocks, bonds, and precious metals

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An increase in savings

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Provides more funds for investments

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An increase in investment

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Expands the productive capacity of the economy

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James has purchased a 10-year-old bond that pays a $50 coupon. If interest rates go up

answer

The bond price will go down

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Increasing and decreasing the money supply through monetary policy is generally done by

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Federal Reserve

question

When the Federal Reserve puts money into the banking system

answer

Short-term interest rates fall

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Tanyika needs a loan to buy furniture for her house. She can get a loan from all the following except

answer

Federal Reserve

question

Rosa expects interest rates to fall for the next 10 years, she should invest her money in

answer

10 year bonds

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If Ted wants to buy a house and believes the interest rates will rise, he should

answer

ApPly for a fixed rate mortgage

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Fiscal policies are actions taken by the government to influence the economy through texting or spending. To assist the economy to come out of the recession, Congress can pursue a fiscal policy that

answer

Lowers taxes

question

In 1791, the US Congress created the Bank of America. The creation of the bank was part of a three-part plan to strengthen the US economy. Who is responsible for presenting the plan to Congress

answer

Alexander Hamilton

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In 1791, the conflict over the bank of the United States led to the foundation of two rival political parties. These two parties were the

answer

Federalist and the Democratic Republican Party's

question

During the 1800s, the nation supply of current sea was tied to its national reserves of either gold or silver. In 1900, and act was passed by Congress that would set the standard by which US Currensy is valued. The standard was set by the

answer

Gold standard act

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In 1913, Congress passed the Federal Reserve act. The purpose of this act was to

answer

Make the federal government responsible for the regulation of interest rates in the supply of money

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A large bill out of savings and loans institutions became necessary in 1990 when it was discovered that nearly 2000 of them were in solvent and facing closure. One of the causes of this crisis was the

answer

Reckless financial speculation following the big Deregulation of the 1980s

Money, Banking, and Finance

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