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5 Written questions

5 Matching questions

  1. interest rate
  2. FDIC (Federal Deposit Insurance Corporation)
  3. commodity of money
  4. interest sensitivity (insensitivity) of planned investment
  5. easy monetary policy
  1. a has value in itself; itemse used as money that also have some intrinsic value
    ex: gold, cigarettes, cattle, candy bars
  2. b created in 1933 and insures deposits in banks
  3. c annual interest payment on a loan EXPRESSED AS A % OF THE LOAN
    ex: $100 interest/$1000 bond = 10%
  4. d how responsive planned investment is to the interest rate; interest sensitivity = "I" responds a great deal to change in "r"; interest insensitivity = "I" responds very little to a change in "r"
  5. e makes money easy to obtain; federal policies that expand money supply (decr. interest rates) in an effort to stimulate the economy

5 Multiple choice questions

  1. makes it a good medium of exchange and store value; it's portable and durable so it's easliy exchanged for goods; how easily something can be exchanged and converted
  2. value of what you give up; = interest
  3. and order or decree; items designated as money that are intrinsically worthless
  4. incr. Y = incr. MD (shift line right)
    decr. Y = decr. MD (shift line left)
  5. federal policies that contract the money supply (raising interest rates) in an effort to restrain the economy

5 True/False questions

  1. open market operationsbuying and selling of gov't securities by the Fed to change reserves; fed buys bonds = incr. MS; fed sells bonds = decr. MS

          

  2. store of valueannual interest payment on a loan EXPRESSED AS A % OF THE LOAN
    ex: $100 interest/$1000 bond = 10%

          

  3. contractionary fiscal policydecr. G (or incr. T, decr. C) in order to decr. output/ rate of growth (in recession); affects goods market (AE, fiscal policy); decr. G= decr. AE2= decr. Y2= decr. MD= decr. r= incr. I= incr. AE3= incr. Y3

          

  4. medium of exchangepeople will accept money in exchange for goods and services; simplifies exchange process

          

  5. interestannual interest payment on a loan EXPRESSED AS A % OF THE LOAN
    ex: $100 interest/$1000 bond = 10%