Question 1

A local bank decides to expand and opens up new branches in neighboring states. This expansion allows it to:

Accepted Answer

A)   further diversify risk.
B)   decrease its reserve ratio.
C)   provide less liquidity.
D)   charge higher interest rates.E) All of the above
F) A) and B)

Question 2

Most savers:

Accepted Answer

A)   lend their money directly.
B)   do not interact with the financial system.
C)   deposit their money into bank accounts, retirement accounts, and life insurance companies.
D)   All of these are true.E) All of the above
F) A) and D)

Question 3

Speculators in the financial market:

Accepted Answer

A)   act as buyers only.
B)   act as sellers only.
C)   buy and sell assets for financial gain.
D)   reduce risk in financial markets.E) All of the above
F) A) and D)

Question 4

When purchasing a futures contract, the buyer:

Accepted Answer

A)   agrees to pay the seller at a later date, based on the asset's future price.
B)   assumes very little risk that the asset's future price will fluctuate.
C)   must pay the seller a set amount, regardless of what the future price turns out to be.
D)   None of these are true.E) A) and D)
F) All of the above

Question 5

The following are all determinants of the supply of loanable funds except:

Accepted Answer

A)   wealth.
B)   expectations of future economic conditions.
C)   social welfare policies.
D)   the rate of return on investment.E) B) and D)
F) A) and B)

Question 6

In a closed economy, national savings is:

Accepted Answer

A)   the sum of the savings of individuals and corporations plus the savings of the government.
B)   the sum of public savings plus private savings.
C)   equal to national investment.
D)   All of these are true.E) A) and B)
F) A) and C)

Question 7

Which of the following is more liquid?

Accepted Answer

A)   The stock of a privately-held company
B)   The stock of a publicly-held company
C)   A house
D)   An antique pocketwatchE) A) and B)
F) B) and C)

Question 8

The demand for loanable funds comes from:

Accepted Answer

A)   investment.
B)   savings.
C)   government-printed money.
D)   household spending on nondurable goods.E) B) and C)
F) All of the above

Question 9

The supply of loanable funds comes from:

Accepted Answer

A)   savings.
B)   investment.
C)   borrowers.
D)   taxes.E) All of the above
F) A) and B)

Question 10

Which of the following is the least liquid?

Accepted Answer

A)   Cash
B)   A checking account
C)   A car
D)   A houseE) B) and D)
F) All of the above

Exam 14: Thebasics of Finance

Most savers:

Correct Answer
verified

The following are all determinants of the supply of loanable funds except:

Correct Answer
verified

The demand for loanable funds comes from:

Correct Answer
verified

When purchasing a futures contract, the buyer:

Correct Answer
verified

In a closed economy, national savings is:

Correct Answer
verified

The supply of loanable funds comes from:

Correct Answer
verified

Which of the following is the least liquid?

Correct Answer
verified

A local bank decides to expand and opens up new branches in neighboring states. This expansion allows it to:

Correct Answer
verified

Speculators in the financial market:

Correct Answer
verified

Which of the following is more liquid?

Correct Answer
verified

Exam 14: Thebasics of Finance

Most savers:

Correct AnswerverifiedShow Answer

The following are all determinants of the supply of loanable funds except:

Correct AnswerverifiedShow Answer

The demand for loanable funds comes from:

Correct AnswerverifiedShow Answer

When purchasing a futures contract, the buyer:

Correct AnswerverifiedShow Answer

In a closed economy, national savings is:

Correct AnswerverifiedShow Answer

The supply of loanable funds comes from:

Correct AnswerverifiedShow Answer

Which of the following is the least liquid?

Correct AnswerverifiedShow Answer

A local bank decides to expand and opens up new branches in neighboring states. This expansion allows it to:

Correct AnswerverifiedShow Answer

Speculators in the financial market:

Correct AnswerverifiedShow Answer

Which of the following is more liquid?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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