Question 1.The most important economic benefit from specialization is that it makes it possible for an economy to begin using money. leads to an increase in the standard of living in an economy. makes barter possible. eliminates the need for financial markets.
Question 2.If you buy a bond issued by Intel, the bond is a(n):
liability to Intel and an asset to you. liability to you and an asset to Intel. liability to both you and Intel. asset to both you and Intel.
Question 3.Securitization is the process of issuing stocks to finance capital spending. issuing bonds to finance purchases of equipment and structures. reducing risk by decreasing corporate debt loads. converting loans into securities.
Question 4.Money is a medium of exchange in that money is generally accepted for buying and selling goods and services. currency may be exchanged for gold at any national bank. other assets may be better or worse in facilitating exchange than money. it must maintain most of its value over time.
Question 5.Financial intermediaries include banks and other depository institutions. include the New York and American Stock exchanges. directly issue claims on individual borrowers to savers. are owned and operated by the federal government.
Question 6.Why do individuals hold money when it does not provide the services that, say, a house does?
Money is the most liquid asset. Money is the only form in which wealth may be held. Money increases in value faster than other assets. Money is useful in avoiding taxes on certain transactions.
Question 7.The purpose of diversification is to increase the liquidity of a financial portfolio. reduce the brokerage fees involved in managing a financial portfolio. reduce risk. reduce tax liability.
Question 8.Monetary policy refers to the government’s decisions on how much money to spend. decisions on how much money to collect in taxes. plans for retiring the national debt. management of the money supply and interest rates to achieve macroeconomic objectives.
Question 9.Economists define liquidity as the difference between the return on the asset and the return on a long-term U.S. Treasury bond. the fraction the asset makes up of an investor’s portfolio. the ease with which an asset can be exchanged for money. the difference between the total demand for an asset and the total supply of the asset.
Question 10.If you purchase a Treasury bond, the Treasury bond is an asset to you as well as an asset to the U.S. government. an asset to you, but a liability to the U.S. government. a liability to you, but an asset to the U.S. government. a liability to you as well as a liability to the U.S. government.
Need Other Tutorials For ECO 316 ?
You may click on the links below to go to respective tutorial. · ECO 316 Week 1 DQ 1 ( Money And Its Functions )
· ECO 316 Week 1 DQ 2 ( Bond Prices and Interest Rates )
· ECO 316 Week 1 Quiz
· ECO 316 Week 2 DQ 1 ( Models of Bond Pricing )
· ECO 316 Week 2 DQ 2 ( Risk and Reward )
· ECO 316 Week 2 Quiz
· ECO 316 Week 3 Assignment ( Final Paper Outline )
· ECO 316 Week 3 DQ 1 ( Stocks And Derivatives )
· ECO 316 Week 3 DQ 2 ( Foreign Exchange Rates )
· ECO 316 Week 3 Quiz
· ECO 316 Week 4 Assignment ( Bank operations using T accounts )
· ECO 316 Week 4 DQ 1 ( Structures and Functions of Financial Institutions )
· ECO 316 Week 4 DQ 2 ( Structures and Function of the Federal Reserve System )
· ECO 316 Week 4 Quiz
· ECO 316 Week 5 Assignment ( Final Paper – The Day the Machines Went off )
· ECO 316 Week 5 DQ 1 ( Potential Money Multiplier )
· ECO 316 Week 5 DQ 2 ( Current Monetary Policy )