BUSN602 Midterm Exam/BUSN 602
BUSN602 Midterm Exam/BUSN 602 Click Link Below To Buy: https://hwaid.com/shop/busn602-midterm-exambusn-602/ Contact Us: [email protected] BUSN602 Midterm Exam Part 1 of 1 – 100.0 Points Question 1 of 20 5.0 Points As interest rates fall, the prices of existing bonds will: A.rise B.stay the same C.fall D.either a or b, depending on the state of the economy E.none of the above Question 2 of 20 5.0 Points You need to have $35,000 on hand to buy a new Lexus five years from today. To achieve that goal, you want to know how much you must invest today in a certificate of deposit guaranteed to return you 3% per year. To help determine how much to investment today, you will use: A.present value factors B.annuity value factors C.present value factors of an annuity D.future value factors of an annuity Question 3 of 20 5.0 Points If you expect the inflation premium to be 2%, the default risk premium to be 1% and the real interest rate to be 4%, what interest would you expect to observe in the marketplace under the simplest form of market interest rates? A.4% B.7% C.2% D.1% Question 4 of 20 5.0 Points The price level of goods and services may be expressed as the ratio of _____________. A.GDP to GNP B.real output to GDP C.Velocity to GDP D.real output to velocity E.none of the above Question 5 of 20 5.0 Points John deposits $2,000 per year at the end of the year for the next 20 years into an IRA account that pays 6%. How much will John have on deposit at the end of 20 years? A.$67,520 B.$73,572 C.$81,990 D.$75,686 Question 6 of 20 5.0 Points The most important savings surplus unit in the economy is: A.the savings of individuals B.corporate savings C.U.S. government savings D.state and local government savings Question 7 of 20 5.0 Points Economists use a ___________________ framework to explain how the prices and quantities of goods and services are determined in a free-market economic system. A.opportunity B.marginal cost C.supply-and-demand D.anti-monopoly E.none of the above Question 8 of 20 5.0 Points The Second Bank of the United States was created to: A.replace the First Bank of the United States B.appease political interests C.restore order to chaotic banking conditions D.all the above Question 9 of 20 5.0 Points The _________ value of a savings or investment is its amount or value at the current time. A.present B.future C.book D.none of the above Question 10 of 20 5.0 Points As interest rates rise, the prices of existing bonds will: A.rise B.stay the same C.fall D.either a or b, depending on the state of the economy Question 11 of 20 5.0 Points Which of the following are not included in M1? A.negotiable orders of withdrawal B.automatic transfer service accounts C.money market deposit accounts D.credit union share draft accounts Question 12 of 20 5.0 Points Continuing federal programs that stabilize economic activity are called A.transfer payments B.automatic stabilizers C.social insurance programs D.none of the above Question 13 of 20 5.0 Points ______________ is the tendency of prices, aided by union-corporation contracts, to rise during economic expansions and resist declines during recessions. A.Administrative inflation B.Speculative inflation C.Cost-push inflation D.Demand-pull inflation Question 14 of 20 5.0 Points Identify the three functions of money. “Money must perform three basic functions: serving as a medium of exchange, a store of value, and a standard of value” (Melicher & Norton, 2014, p 26). Question 15 of 20 5.0 Points The federal government pays for the services it provides primarily through: A.taxation B.creating money C.borrowing D.selling assets owned by the government Question 16 of 20 5.0 Points A saver who chooses securities as a savings medium and desires maximum safety of principal buys: A.public utility stocks B.corporate stocks C.high-grade corporate bonds D.government bonds Question 17 of 20 5.0 Points The saving-investment process involves which of the following financial functions: A.creating and transferring money B.accumulating savings and lending and investing money C.marketing and transferring financial assets D.all of the above Question 18 of 20 5.0 Points During the early years of the life stage of a typical corporation, the: A.volume of physical assets increases slowly B.firm is unable to establish a strong position with respect to its financial assets C.corporation is a heavy provider of financial assets D.need for borrowed capital is small Question 19 of 20 5.0 Points You need $8,000 four years from now for a down payment on your future house. How much money must you deposit today if your credit union pays 5% interest compounded annually? Pick the closest answer. A.$6,269.59 B.$6,578.95 C.$6,394.12 D.$6,189.83 Question 20 of 20 5.0 Points When investors expect __________ inflation rates they will require __________ nominal interest rates so that a real rate of return will remain after the inflation. A.higher, higher B.higher, lower C.lower, higher D.none of the above
