BBA-QUIZ-A-D1-3 - FIN 301 QUIZ 1 Class: D _ Name:_ Student...

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FIN 301 QUIZ 1 Class: D ____ Name:___________________ Student I.D.:________________________ A Multiple Choice (60%) ( ) 1. The gross domestic product is the A) the value of all wealth in an economy. B) the value of all goods and services sold to other nations in a year. C) the market value of all final goods and services produced in an economy in a year. D) the market value of all intermediate goods and services produced in an economy in a year. ( ) 2. Which of the following items are not counted in U.S. GDP? A) your purchase of a new Ford Mustang B) your purchase of new tires for your old car C) GM's purchase of tires for new cars D) a foreign consumer's purchase of a new Ford Mustang ( ) 3. The measure of the aggregate price level that is most frequently reported in the media is A) GDP deflator B) producer price index C) consumer price index D) personal consumption expenditure deflator ( ) 4. Financial markets have the basic function of A) getting people with funds to lend together with people who want to borrow funds. B) assuring that the swings in the business cycle are less pronounced. C) assuring that governments need never resort to printing money. D) providing a risk-free repository of spending power. ( ) 5. The primary assets of depository institutions are A) deposits. B) business loans. C) mutual funds. D) commercial paper. ( ) 6. Increasing the amount of information available to investors helps to reduce the problems of the financial markets. A) adverse selection; moral hazard B) adverse selection; risk sharing C) moral hazard; transactions costs D) adverse selection; economies of scale 1
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( ) 7. The purpose of the disclosure requirements of the Securities and Exchange Commission is A) increase the information available to investors. B) prevent bank panics. C) improve monetary control. D) protect investors against financial losses. ( ) 8. As a store of value, money A) does not earn interest. B) cannot be a durable asset. C) must be currency. D) is a way of saving for future purchases. ( ) 9. If an individual moves money from a savings deposit account to a money market deposit account, A) M1 decreases and M2 stays the same. B) M1 stays the same and M2 increases. C) M1 stays the same and M2 stays the same. D) M1 increases and M2 decreases. ( ) 10. If an individual redeems a U.S. savings bond for currency A) M1 stays the same and M2 decreases. B) M1 increases and M2 increases. C) M1 increases and M2 stays the same. D) M1 stays the same and M2 stays the same. ( ) 11. . A credit market instrument that pays the owner a fixed coupon payment every year until the maturity date and then repays the face value is called a A) simple loan. B) fixed-payment loan. C) coupon bond.
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This note was uploaded on 04/16/2011 for the course ECON 121 taught by Professor Lily during the Spring '11 term at Clinton Community College.

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BBA-QUIZ-A-D1-3 - FIN 301 QUIZ 1 Class: D _ Name:_ Student...

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