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






2. Long-Term Debt and Equity Instruments






3. Promotes economic efficiency by minimizing the time spent in exchanging goods and services






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






5. Praises rising at a fast and furious pace






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






7. 3 -6 -12 month securities with no explicit one payment and is sold at a discount. These securities are highly liquid - and can be traded in the secondary market. These are some of the safest securities.






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






9. It will shift it to the right.






10. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






12. What kind of movements should we pay attention to in money supply numbers?






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






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






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






16. 2 -5 -10 year maturities






17. Held for one- ten years.






18. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits






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






20. Flow of earnings per unit of time






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






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






23. Allowing consumers to time their purchases better.






24. 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






25. Most Common






26. Determines interest rates






27. The percent of available labor force unemployed






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






29. Yields similar for all maturities






30. One to Ten year maturities which fund long-term capital investments






31. It determines the equilibrium interest rate in terms of the supply of land demanded for money . People store their wealth in money and bonds. If the market for money is in equilibrium (Ms=Md) then the bond markets are also in equilibrium (Bs=Bd)






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






33. A bank loan typically used by a company to finance storage or shipment of goods. This bank draft is like a check - and guarantees future payment. These securities are active in the Secondary Market

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34. Seller will buy back the asset at a later date and typically at a higher price. These securities are usually government securities and are used by banks and Large Corporations.






35. Excess liquidity is spent on goods and services






36. 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.






37. Used to measure value in the economy






38. At lower prices (higher i) - ceteris paribus - the quantity demanded of bonds is higher- an inverse relationship ' ' the quantity supplied of bonds is lower- a positive relationship.






39. Lower the equilibrium price and interest rate.






40. Many lead to more employment and output






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






42. 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.






43. Interest rate that equates today's value with present value of all future payments.






44. 30 year maturities but not since 2001






45. Prices of Long-Term securities are more volatile possibly suffer Capital Loss if owner needs to sell security prior to maturity. Prefer to hold Short-term securities for liquidity. Suggests Long term rates will always be higher than short term.






46. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period






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






48. 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






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






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