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DSST Money And Banking

Subjects : dss, bankingt
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money






2. The market for loanable funds: (or equivalently - the market for bonds) determines R. One-for-One






3. Lower excess demand and lower price will rise and interest rates will fall






4. Less accurate but is less difficult to calculate. It always understates the yield to maturity and becomes more severe the longer the maturity.






5. Excess liquidity is spent on goods and services






6. Periods of declining aggregate output - unemployment high - investment is low.






7. Supply and demand concept for different maturities will establish the specific rates for each maturity range. Changes in supply and demand can cause the rates to get out of line with expectations. However investors will drop preferred habitat if rate






8. Yield curves most always...






9. How interest rates on bonds of different maturities move over time






10. The total collection of pieces of property that serve to store value






11. Paper currency - has no real value






12. Lower the equilibrium price and interest rate.






13. Markets bonds - loans - and deposits denominated in the currency of a given nation but held and traded outside that nations borders.






14. Short-Term Debt Instruments






15. Influence on business cycle - inflation - interest rates






16. It will shift it to the right.






17. Anything that is generally accepted in payment for goods or services or in the repayment of debts; a stock concept






18. Purchase financial assets which lowers interest rates which stimulates business investment and consumer spending






19. Expectations theory forms the foundation of the slope of the curve. Liquidity Premium Theory makes Long Term permanent modifications that suggests an up ward slopping curve. Over short periods - relatives supplies of securities have an impact on yiel






20. A dollar paid to you one year from now is less valueable than a dollar paid to you today






21. A debt security that promises to make payments periodically for a specified period of time.






22. Used to measure value in the economy






23. Higher default risk compared to municipal Bonds






24. Graphical relationship of the yield on bonds with differing terms to maturity but the same risk - liquidity and tax considerations.






25. For a commodity to function efficiently as money it must be...






26. Sold in a foreign country and denominated in that country's currency.






27. If the short-term interest rates are high than the yield curve slopes?






28. Fixed payment (incorporating part of the principal and interest payment) paid over a period of time






29. The relationship between yield and maturity is...






30. Greater incentive to borrow and less to lend.






31. Long-Term debt instruments of Corporations which are held 2-30 years. These securities have excellent credit ratings and pay interest two times a year and pay at maturity. These can be redeemed for shares of stock.






32. Nominal interest rate is not adjusted for inflation.






33. The higher the default risk means the yield curve...






34. Crucial role in creation of money






35. Used to save purchasing power; most liquid of all assets but loses value during inflation






36. Real interest rate: the real interest rate people expect at the time they buy a bond or tax out a loan.






37. Relationship among yields of different maturities of hte same type of security.






38. Investors are concerned about the after tax return on bonds






39. Banks borrow from and lend to each other deposits they hold at the Fed. These are very short term and usually only held over night.






40. The interest rate at which private depository institutions lend balances to other depository institutions usually over night






41. A share of ownership in a corporation






42. A higher level of income causes the demand for money at each interest rate to increase and the demand curve to shift to the right.






43. Allows transfer of funds from person or business without investment opportunities to one who has them - improves economic efficiency.






44. No interest- rate risk

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45. Precious Metals or another valueable commodity






46. Yield to maturity; a measure of an interternporal price






47. (Nominal) Interest Rate that is adjusted for expected changes in the price level. The more accurately reflects true cost of borrowing.






48. Intermediate Yields are highest






49. The upward and downward movement of aggregate output produced in the economy.






50. Does not deal directly with the public and responsible for executing of the national monetary policy; implements policy by altering money supply and influencing bank behavior.