1. The holder of preference shares has preference over the ordinary shareholders under the following circumstance: _______.
4 G1 B, k z" L% w A. his voting rights are considered more important+ S2 N& q' B6 T" Y i
B. he has the greater right in choosing the board of directors0 G$ H# z( q7 z
C. he receives his dividend before the ordinary shareholder6 m/ O) f, m$ E- h/ H$ W
D. he has the right to buy ordinary shares more cheaply
/ R7 `: _: h$ V6 W8 o+ c7 f 2. What are the two major accounts in the balance of payments______.* X \- P) C: K0 s1 ]2 d9 S
A. Current account and fixed account
8 Y. I7 P F& _7 |# d B. Capital account and deposit account" c: \5 O8 x0 L9 F1 k2 L1 y
C. Capital account and current account4 U2 s1 A+ g$ u9 z
D. The account recording transfer payment and the account including an offsetting transaction% q" S3 S P! ^( i
3. Which of the following is not a financial instrument______.
, M/ a( |7 h( `" ]9 S A. Treasury bills8 ]3 h3 f9 \( ]* |0 ^8 m8 b
B. Real estate& J+ F4 ^5 J" |
C. Mortgages* l0 Y( e- ]: s( r/ A) ~
D. Stocks; B4 p" n v$ u5 X4 ^
4. The yield to maturity on a bond is ______., ?2 n% [0 O( U* E% J4 K) S
A. below the coupon rate when the bond sells at a discount, and above the coupon rate when the bond sells at a premium1 E% R% ^" N8 P
B. the discount rate that set the present value of the payments equal to the bond price
. `, E5 {$ l& | C. the current yield plus the average annual capital gain rate' `7 O) |; N+ j- ^# M) l r
D. based on the assumption that any payments received are reinvested at the coupon rate6 S! B7 b8 T! h1 [/ b0 x
5. The annual interest paid on a bond relative to its prevailing market price is called its ______.$ y/ E) ?% x% q3 a: ~. L
A. promised yield; D% h5 y6 w% E- w
B. yield to maturity
* w) k" Y0 k' k+ J+ I* @2 k C. coupon rate
: f8 c3 I3 l8 Q" l) n6 b0 J T- ` D. current yield, `9 y, _3 Y4 O" d- A! m2 q2 L
6. Rapid increases in the price level during periods of recession or high unemployment are known as .
* r3 ]* N9 a$ @$ b A. stagnation
A R2 u4 Z1 B' ^8 T$ [ B. stagflation. s* E0 G/ j! \- P( q" A) s
C. slump4 c/ m5 v& ?; l2 w4 t7 y- }6 S
D. inflation
) f H# D) @; K* [& b" C6 B. r 7. A person who left his/her job to look for another job would be classified as ______.
[; h) T9 [5 n& H# S+ r9 j- n A. structurally unemployed; N7 U1 G) R- t
B. cyclically unemployed
# ^4 f% H9 j/ ^5 F R C. frictionally unemployed' g# w0 s: Y% {5 G: l7 ^
D. no longer in the labor force
' W5 p) U: D+ O: c! r 8. Which of the following is not included in a statement of owner's equity______.3 ]$ B1 A" N% F" Z* H1 ]( e- O
A. Net income \3 o+ T O! g3 ?% A1 X4 U) c
B. Unearned revenue/ A& J: z4 V) F2 N
C. Dividend
/ @9 d3 A" e: N2 M D. Retained earning
C! T3 G P- _5 V% P6 O 9. If the Federal Reserve sells bonds and Congress cuts taxes and increases government spending,then the U.S. government has ______.
* i* w9 Q2 A& j: l A. expansionary monetary policy and contractionary fiscal policy
; C/ V$ {$ a! F9 w B. contractionary monetary policy and expansionary fiscal policy* k& s; E8 O v, p m* R
C. expansionary monetary policy and expansionary fiscal policy% { `1 m! _& h) C! U3 Y
D. ontractionary monetary policy and contractionary fiscal policy0 s, i- @# ^: L4 o$ @
10. As the real wage rises, the substitution effect causes the worker to consume more ______ and less ______.4 Z8 t K" e" n1 }% v3 p
A. leisure... work) J5 z7 A5 L+ U* i
B. work... leisure
0 i4 L8 U2 |# h C. work.. .of all of other goods1 B, b& S7 F0 I0 j. T m( t
D. leisure.. .of all other goods* o' q3 H3 Y* I! `5 w1 X+ X" h, A
11. The federal funds rate is the interest rate ______.
* g: f: o1 F, T2 }9 Z- I& O A. on overnight loans of reserves between banks
& i0 B6 C4 n+ L) u2 U7 }1 | B. the government pays when borrowing from banks
/ X, h2 n# v5 a6 b9 t" b C. on government debt! N) M! \; V; L& Q: s1 \
D. both A and B
9 R4 j2 D' t, K& R" a 12. A consumer's indifference curve shows ______.0 v0 P9 h9 w( C7 w3 ]( Z w! n
A. all combinations of two products that a consumer can use/ X8 Z" s0 K- Y! R
B. all combinations of two products that yield the same total satisfaction to the consumer
, f6 J( W8 U2 E6 K, L W5 _ C. all combinations of two goods that the consumer can purchase with disposable persona income" N7 Q) F' x2 m8 e E8 q& e
D. equal income for consumption3 i) M9 n* K0 P+ g7 F1 H, r0 ~
13. The value of any investment is found by computing ______.$ n* z: R$ j2 Y5 D6 G) w5 Z
A. the future value of all future expenses$ z4 Z+ Z R) q: g/ T
B. the future value of all sales9 b. U. i6 P$ O9 ?
C. the present value of all future liabilities
. L! o* A& X: V0 h D. the present value of all cash flows3 @3 L8 h$ R n) @7 l
14. A "base" or "high-powered" money is distinguished from other types of money by the fact that it .9 B) a" F2 q! c) g/ c) u% j8 f1 w
A. always consists of central-bank liabilities, J8 O7 c; W! }, |+ ^; g, B- V0 i
B. always consists of assets that can serve as commercial bank cash reserves5 |7 O2 f$ c) W+ u5 j$ p
C. always consists of gold coin
% b H$ |" M. d& [- U: | D. must be a "fiat" money0 N* ]: }& S& r* c7 t( `! w
15. The relationship between interest rates on various bonds, and the time to (heir maturity is called the ______ structure of interest rates.
8 p" W }( c# C. K4 A# B3 d A. chronological
3 `$ [& s4 f7 V' Y B. term
" y( r) X% c: H0 P C. risk( A, S: r$ I! w' J( ^ V9 I: X2 S
D. liquidity) |$ X) r1 o, Q" x# I
16. An example of an investment pool is ______.
* F6 z. R0 d2 N7 U! @5 b) r A. a savings and loan association
% V* h% {9 U8 V$ }' N6 T- ]- F" }4 f B. a life insurance company8 U0 ?1 }/ ]' t9 W1 q: C6 y
C. a finance company
, R+ O1 u& w( c+ E0 M D. a mutual fund
: o/ G: v- A0 I0 F6 o 17. Sustained downward movements in the business cycle are referred to as ______.4 T& ~1 X" A/ J" C& g* W
A. recessions |