Test your basic knowledge |

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 transaction costs - reduce risk - asymmetric information.






2. Praises rising at a fast and furious pace






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






4. 30 year maturities but not since 2001






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






6. 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.






7. 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.






8. Higher default risk compared to municipal Bonds






9. It will shift it to the right.






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






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






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






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






14. Instrumental in moving funds between countries






15. What will investors expect for taking on higher default risk?






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






17. Comparing payoffs at different points in time






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






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






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






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






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






23. Yields similar for all maturities






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






25. Many lead to more employment and output






26. 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.






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






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






29. Excess liquidity is spent on goods and services






30. 2 -5 -10 year maturities






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






32. Allowing consumers to time their purchases better.






33. Precious Metals or another valueable commodity






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






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






36. 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.






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






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






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






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






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






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






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






44. Paper currency - has no real value






45. 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.






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






47. The central bank






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






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






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