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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. Lower the equilibrium price and interest rate.






2. Pays owner of bond a fixed payment - until maturity when it pays off face par value






3. 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.






4. No interest- rate risk

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






6. Nominal interest rate is not adjusted for inflation.






7. Lower transaction costs - reduce risk - asymmetric information.






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






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






10. They channel funds from savers to investors - thereby promoting economic efficiency






11. Less than one year and service current liquidity needs






12. Many lead to more employment and output






13. Influence on business cycle - inflation - interest rates






14. A rise in the price level causes the demand for money at each interest rates to increase and the demand curve to shift to the right.






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






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






17. Precious Metals or another valueable commodity






18. Used to measure value in the economy






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






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






21. Flow of earnings per unit of time






22. Crucial role in creation of money






23. Determines interest rates






24. Lower excess supply and lower price will fall and interest rates will rise






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






26. Intermediate Yields are highest






27. Foreign currencies deposited in banks outside the home country.






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






29. Short-Term securities are very good substitutes for each other within investor's portfolios who collectively impact the market. There aren't separate markets for short-term and long-term securities - there is one single market.






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






31. Held ten years or more. They pay semiannual dividends and return of principal at maturity.






32. Restrictions on Entry - Restrictions on Assets and Activities - Disclosure - Deposit Insurance - Limits on competition - and restriction on interest rates.






33. Cost of borrowing money - expressed as a percentage of the amount borrowed per year.






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






35. Comparing payoffs at different points in time






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






37. 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.






38. Negotiable in secondary market and can also be resold in the secondary market. Minimum purchase of $100 -000 but the minimum in the secondary market is $2 -000 -000.






39. Lower Incentive to borrow but a greater incentive to lend.






40. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money






41. Real interest rate: the real interest rate actually realized.






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






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






44. Financial instruments whose return is based on the underlying returns on mortgage loans.






45. Medium of exchange; unit of account; store of value; increases the liquidity in the economy






46. Short-Term Debt Instruments






47. More than 10 year maturities






48. The central bank






49. The increase in the price of set goods and services in a given economy over a period of time - the percent change.






50. If short-term interest rates are low than the yield curve slopes...