Which of the following accurately describes socially responsible investing?

Investors buy into companies with ethical practices they support.

Which can the Fed accomplish by raising or lowering the required reserve ratio?

increase or decrease the money supply

Which accurately explains what an exchange rate of 1:9 between the European euro and Mexican pesos means?

It takes only one euro to buy nine pesos.

Which often occurs when a company goes public?

greater pressure to make bigger profits

Which must businesses generally have to have to get loans from a private bank?

a history of profitable operation

Which best describes the meaning of "going public"?

when a company begins selling shares of its stock to the public

Which most accurately explains why fiat money differs from commodity money?

Fiat money only has value as a medium of exchange.

Which statement accurately describes the requirements banks must meet under a fractional reserve banking system?

Banks must keep a specific percentage of deposits on hand.

Which is the purpose of the Federal Reserve Bank?

manage the growth of the U.S. economy

Which best explains why the money supply is decreased when the government issues bonds?

The purchase of bonds reduces the bond buyers' bank accounts.

Which does buying on margin involve?

traders borrowing money from their brokers

Which describes the most likely effect of the Fed buying millions of dollars in T-bonds?

an increase in the money supply

Which is a risk of being a stockholder?

may not get an increase in the amount of one’s investment

Which best explains how bondholders and banks serve a similar function?

both are holders of someone else's debt

A commodity futures market exists within the broader commodities market for which reason?

Contracts setting the price & date for commodity purchases are transferable

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4.12 Unit Test Money, Money, Money

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Questions 25

Answers

1
Which is traded in a currency exchange market?
treasuries
unprocessed goods
foreign money
shares in corporations
2
Which of the following accurately describes socially responsible investing?
Investors attempt to maximize profits for society instead of for themselves
Investors vote for a board of directors from their own society.
Investors give some of their profits to nonprofit corporations.
Investors buy into companies with ethical practices they support.
3
Which is the act of buying and selling money using other types of money?
issuing dividends
decreasing utility
exchanging currency
maximizing profits
4
In which would wheat be purchased?
currency exchange market
bond market
stock market
commodity market
5
Banks are often unwilling to loan money to a business in early stages, so what is difficult for startup businesses?
finding an angel investor
conducting an initial public offering
getting debt financing
securing venture capital
6
Which describes the type of exchange that does not use money?
purchasing
financing
bartering
borrowing
7
Which can the Fed accomplish by raising or lowering the required reserve ratio?
reduce housing prices
ensure an equitable distribution of wealth
increase or decrease the money supply
prevent a budget deficit
8
Which accurately explains what an exchange rate of 1:9 between the European euro and Mexican pesos means?
It takes only one peso to buy nine euros.
Prices are lower in Europe than in Mexico.
Goods and services are nine times as expensive in Europe.
It takes only one euro to buy nine pesos.
9
Which often occurs when a company goes public?
greater pressure to make bigger profits
an increase in debt payments
a reduction in productive efficiency
an increase in its bond rating
10
Which must businesses generally have to have to get loans from a private bank?
an exit strategy
a history of profitable operation
a wealthy startup investor
an online advertising budget
11
Which describes someone's expected outcome from investing in the stock market?
making profit from savings
slowing the productive processdecreasing the money supply
raising his or her wage level
decreasing the money supply
12
Which best describes the meaning of "going public"?
when a company starts offering its products for sale
when a company begins selling shares of its stock to the public
when a company is bought out by a government agency
when a company issues Treasury bonds that can be bought by anyone
13
A company that wanted to increase its capital through equity financing would most likely get involved in which market?
commodity market
currency exchange market
bond market
stock market
14
Which most accurately explains why fiat money differs from commodity money?
Fiat money only has value as a medium of exchange.
Fiat money can also be used as a productive input.
Fiat money has value because it is a precious metal such as gold.
Fiat money has value because it enables the barter system to work.
15
A company that wanted to increase its capital through debt financing could trade in which market?
stock market
commodity market
currency exchange market
bond market
16
Which statement accurately describes the requirements banks must meet under a fractional reserve banking system?
Banks reserve the right to raise interest rates at any time.
Banks must pay a specific fraction of their assets in taxes.
Banks must get government approval for all loans.
Banks must keep a specific percentage of deposits on hand.
17
Which is the purpose of the Federal Reserve Bank?
prevent stock market fraud
protect bank depositors against losing their money
manage the growth of the U.S. economy
issue government bonds
18
Which best explains why the money supply is decreased when the government issues bonds?
The purchase of bonds reduces the bond buyers' bank accounts.
The sale of bonds enables the government to run a budget surplus.
The trading of bonds interferes with other types of economic activity.
The issuing of bonds increases competition among private banks.
19
Which describes a condition that is LEAST favorable for conducting an IPO?
an economic boom
a bear market
a recession
a bubble
20
Which does buying on margin involve?
brokers putting off the risk of default onto traders
traders risking large amounts of money for small profits
brokers buying for traders in various foreign currencies
traders borrowing money from their brokers
21
Which describes the most likely effect of the Fed buying millions of dollars in T-bonds?
a decrease in the money supply
an increase in the money supply
an increase in unemployment
a reduction in the inflation rate
22
Which is a risk of being a stockholder?
can increase investment if the price of one’s stock goes up
able to vote for members of the board of directors
might receive dividends when the company makes a profit
may not get an increase in the amount of one’s investment
23
On which does technical analysis of the stock market focus?
the revenue of a corporation
the ratio of costs to benefits
calculating opportunity costs
overall trends in the market
24
Which best explains how bondholders and banks serve a similar function?
both take deposits and issue withdrawals
both have to charge government-determined interest rates
both are required to reserve certain assets
both are holders of someone else's debt
25
A commodity futures market exists within the broader commodities market for which reason?
Commodities cannot be sold until they have been extracted from nature.
Forward contracts allow brokers to pay for commodities up front.
The exchange rate for commodities varies as time goes on.
Contracts setting the price & date for commodity purchases are transferable

4.12 Unit Test Money, Money, Money Flashcards | StudBud