Knowledge of Capital Markets - Economic Factors ALL

A member of the Federal Reserve System wanting to increase its reserves could do so by borrowing money from A)the Federal Reserve Board (FRB) at the discount rate. B)another FRB member bank at the prime rate. C)the Federal Reserve Board (FRB) at the federal funds rate. D)another FRB member bank at the discount rate.

A

A surplus in the U.S. balance of payments can occur if I.interest rates in foreign countries are higher than U.S. domestic rates II.interest rates in foreign countries are lower than U.S. domestic rates III.U.S. consumers are purchasing (importing) foreign goods IV.foreign consumers are purchasing (importing) U.S. goods A)II and IV B)II and III C)I and IV D)I and III

A

A toy company is experiencing sudden strong demand for a game. Purchasing this company's stock may prove profitable in the short run. This company's stock might BEST be termed as a(n) A)Special situation B)Short sale C)Cyclical D)Growth

A

According to the U.S. Commerce Department, the economy is in a depression when a decline in real output of goods and services lasts A)18 months or more (6 quarters) B)6 months or more (2 quarters) C)9 months or more (3 quarters) D)beyond 12 months (4 quarters)

A

An expansion in the business cycle would be characterized by A)increasing consumer demand for goods and services, increasing industrial production, and rising stock markets and property values B)higher consumer debt, rising inventories C)increasing college enrollments and enlistment in military service D)increase in want ads in newspapers, decrease in nonfarm jobs

A

Economic reports show that there is a general rise in prices for consumer goods and a high unemployment rate occurring simultaneously. This combination can best be described as A)stagflation B)stagnation C)inflation D)deflation

A

Federal Reserve member banks needing to borrow money can borrow from A)the Federal Reserve Bank at the discount rate. B)member firms at the discount rate. C)the Federal Reserve Bank at the federal funds rate. D)non-member banks at the federal funds rate.

A

Implementing monetary policy, and thereby undertaking the responsibility to maintain the stability of the U.S. financial system, is A)the Federal Open Market Committee (FOMC) B)the Internal Revenue Service (IRS) C)the Securities and Exchange Commission (SEC) D)the New York Stock Exchange (NYSE)

A

Industries that tend to be highly sensitive to inflation, deflation and the ups and downs of business trends would BEST be described as A)Cyclical B)Growth C)Keynesian D)Defensive

A

Just as markets can be influenced by many factors, so can the market price of a single company's stock. While all of the following could impact a company's stock price to some extent, which would be the least likely to have a direct and immediate impact? A)Political elections B)Federal Reserve Board (FRB) policies C)Changes in the business cycle D)The company's earnings

A

Large time deposits of more than $100,000 are considered to be found in what part of the money supply? A)M3 B)M1 and M2 C)M2 D)M1

A

Of the statements listed, which best characterizes the potential impact of factors occurring outside our domestic economy and markets? A)Factors outside the United States can have immediate and prolonged impact on our securities and trade markets, and thus our domestic economy. B)Factors outside the United States can impact our securities and trade markets, but the effects are always short term and thus impact our domestic economy very little. C)Factors outside the United States have little impact on our securities and trade markets, and thus our domestic economy. D)Factors outside the United States never have immediate impact on our securities and trade markets, but over time can impact our domestic economy.

A

Rising employment due to an increase in demand for goods and services would be associated with periods of A)inflation B)deflation C)stagflation D)stagnation

A

Select the two distinctive types of policies that impact the U.S. economy. A)Monetary and fiscal B)Balance of payments and balance of trade C)Federal and municipal D)M1 and M2

A

The U.S. gross domestic product is best described as A)all goods and services produced within the nation B)all goods and services produced domestically but sold overseas C)all services produced in the nation only D)all goods produced in the nation minus the value of all services produced

A

The broker loan rate charged by banks is also known as A)the call loan rate B)federal funds rate C)prime rate D)discount rate

A

The business cycle is generally viewed as having how many stages? A)4 B)3 C)6 D)2

A

The cost of doing business is closely linked to the cost of money, which is known as A)interest B)supply C)demand D)M1

A

The economy is showing that employment is low, there is little consumer demand, and loans for expansion and retooling are way down, showing a lack of business activity. Yet prices for consumer goods are still rising. Economists would call this a period of A)stagflation B)deflation C)stagnation D)inflation

A

U.S. consumers are increasing their imports of foreign-made goods. On this data alone, one might expect gross domestic product (GDP) to A)decrease B)initially increase sharply and then decrease C)increase D)remain the same

A

When engaging in open-market operations, taking actions to either expand or contract the money supply, the FRB will buy or sell A)Treasury securities B)corporate bonds C)U.S government agency securities D)corporate equity securities

A

When the Federal Open Market Committee (FOMC) directs that Treasury securities be purchased in the open market, this A)increases the supply of money B)is intended to hinder contraction of the money supply C)decreases the money supply D)stabilizes the money supply

A

When the Federal Reserve Board (FRB) utilizes the tools available to it, it is influencing A)the money supply B)the amount of money raised through taxes C)fiscal policies D)the federal budget

A

When the Federal Reserve Board wants to contract (tighten) the money supply, it will A)sell Treasury securities to banks in the open market B)buy Treasury securities from banks in the open market C)buy corporate securities from banks in the open market D)sell corporate securities to banks in the open market

A

When the Federal Reserve Board wants to expand (loosen) the money supply, it will A)buy Treasury securities from banks in the open market B)sell Treasury securities to banks in the open market C)Sell corporate securities to banks in the open market D)buy corporate securities from banks in the open market

A

When the money supply in the economy decreases, A)interest rates go up, hence borrowing and spending for consumers is more difficult B)interest rates go down, hence borrowing and spending for consumers is easier C)interest rates go up, hence borrowing and spending for consumers is easier D)interest rates go down, hence borrowing and spending for consumers is more difficult

A

Which of the following BEST fits the description of a "growth" stock? A)Common shares in companies that retain earnings and pays little or no dividends B)Common or preferred shares in companies, which experience growth in unusual, nonrecurring profitable circumstances C)Preferred shares in companies that back stated dividends with investments in pharmaceutical companies D)Common shares in companies that pay a high dividend on rapid growth experience

A

Which of the following is a TRUE statement with regard to either U.S. securities laws or the description of international economic factors? A)When the U.S. dollar is strong, foreign currency buys fewer U.S. goods. B)A tombstone advertisement may be used in lieu of a prospectus in the distribution and sale of corporate securities. C)When a company files for bankruptcy, claims of preferred shareholders are settled before all others. D)The Securities Act of 1933 regulates secondary markets and trading on exchanges.

A

Which of the following regarding monetary or fiscal policy is TRUE? A)Monetary policy is what the FRB engages in when it attempts to influence the money supply. B)Monetary policy refers to the actions that Congress takes when it attempts to influence the money supply. C)Fiscal policies are governmental budget decisions enacted by the Federal Reserve Board. D)Fiscal policies are the actions taken by the president and Congress to regulate the amount of money consumers will be able to borrow.

A

Which of the following would be the interest rate charged for overnight, uncollateralized loans negotiated between two money center banks? A)Federal funds rate B)Discount rate C)Repo rate D)Prime rate

A

Which segment of the business cycle would one expect to find rising interest rates and higher wages? A)Expansion B)Contraction C)Trough D)Recession

A

A bank is likely to do which of the following when the Federal Reserve Board (FRB) eases the money supply? A)Raise its broker call loan rate. B)Lower its prime rate. C)Lower the hypothecation loan rate. D)Raise its prime rate.

B

A barometer of short-term interest rates and one that is therefore considered the most volatile interest rate in the U.S. economy is A)the broker call loan rate B)the federal funds rate C)the discount rate D)the prime rate

B

A deficit in the U.S. balance of payments can occur if I.interest rates in foreign countries are higher than U.S. domestic rates II.interest rates in foreign countries are lower than U.S. domestic rates III.U.S. consumers are purchasing (importing) foreign goods IV.foreign consumers are purchasing (importing) U.S. goods A)I and IV B)I and III C)II and III D)II and IV

B

A registered representative has a customer buying securities, but rather than paying in full, the customer wants to borrow some of the money needed for the purchase from the broker-dealer. It is explained to the customer that in order to borrow the money, there will be interest payable based on A)the prime rate B)the broker call loan rate C)the discount rate D)the federal funds rate

B

A strong U.S. dollar leads to more A)U.S. imports and a balance of payments surplus B)U.S. imports and a balance of payments deficit C)U.S. exports and a balance of payments surplus D)U.S. exports and a balance of payments deficit

B

Currency held by the public, including checking accounts and time deposits less than $100,000, and money market mutual funds would best be described by economists as A)M4 B)M2 C)M3 D)M1

B

Deflation occurs during A)a depression, coinciding with economic expansion in the business cycle B)a recession, coinciding with an economic contraction C)a recession, coinciding with economic peaks D)a depression, coinciding with an economic trough in the business cycle

B

Deflationary periods are characterized by all of the following EXCEPT A)coinciding with recessions B)increased consumer demand C)rising unemployment D)a decline in prices

B

Downturns in the business cycle or economic contractions are characterized by all of the following EXCEPT A)higher consumer debt B)falling inventories C)rising numbers of bankruptcies D)rising numbers of bond defaults

B

Economists refer to longer, more severe contractions in the economy as A)depletions B)depressions C)recessions D)declines

B

Exports from the United States would likely increase if I.the Japanese yen strengthened against the dollar II.the U.S. dollar strengthened against the euro III.the U.S. dollar weakened against the British pound IV.the Swiss franc weakened against the dollar A)II and III B)I and III C)II and IV D)I and IV

B

Fiscal policy I.is the most efficient means for solving short-term economic issues II.is not considered the most efficient means to solve short-term economic issues III.is reflected in the budget decisions enacted by our president and Congress IV.is reflected in the money supply decisions enacted by the Federal Reserve Board A)II and IV B)II and III C)I and III D)I and IV

B

Laws increasing or decreasing taxation would be best associated with A)monetary policy enacted by the president and Congress B)fiscal policy enacted by the president and Congress C)fiscal policy enacted by the Federal Reserve Board D)monetary policy enacted by the Federal Reserve Board

B

Match the following statement to the BEST expression: A well-controlled, moderately increasing money supply leads to price stability and a healthy economy. A)Balance of payments B)Monetarist Theory C)Keynesian Theory D)Socialism

B

Money available to lend to corporations and consumers is impacted most in the United States by the policies of which of the following? A)The Internal Revenue Service (IRS) B)The Federal Open Market Committee (FOMC) C)The Securities and Exchange Commission (SEC) D)The National Securities Clearing Corporation (NSCC)

B

The U.S. balance of payments deficit would decrease in all of the following scenarios EXCEPT A)a decrease in dividend payments by U.S. companies to foreign investors B)a decrease in purchases of U.S. securities by foreign investors C)an increase in exports of domestic goods from the United States D)a decrease in imports of foreign goods into the United States

B

The business cycle includes all of the following classifications EXCEPT A)expansion B)waves C)trough D)peak

B

Those industries that are LEAST affected by normal business cycles are A)Special situation B)Defensive industries C)Cyclical industries D)Growth industries

B

To arrive at M3, one would add to M2 which of the following? A)Savings and checking accounts B)$100,000 and larger time deposits and repurchase agreements C)Gold and silver bars held on reserve at the FR D)All currency in circulation, including coins

B

To ease its monetary policy, allowing consumers to borrow more easily, the Federal Reserve Board can A)lower the federal funds rate B)lower the discount rate C)raise the federal funds rate D)raise the discount rate

B

To grow or expand the economy, U.S. fiscal policy should be to A)raise taxes and government spending for programs and development B)cut taxes and increase government spending for programs and development C)raise taxes and cut all government spending for programs and development D)cut taxes and government spending for programs and development

B

To prevent inflation by tightening the availability of credit, the FRB would do any of the following EXCEPT A)sell U.S. government securities in open-market operations B)lower the prime rate C)raise the discount rate D)raise the reserve requirement

B

To stimulate the economy during a recession by expanding the availability of credit, the FRB would do any of the following EXCEPT A)lower the discount rate B)raise the federal funds rate C)buy U.S. government securities in open-market operations D)lower the reserve requirement

B

Tools available to the Federal Reserve Board (FRB) include A)open-market operations, setting the discount rate, and enacting tax laws B)open-market operations, setting the discount rate, and setting reserve requirements C)setting the Fed funds rate, setting the prime rate, and setting the discount rate D)setting the discount rate, enacting tax laws, and setting the Fed funds rate

B

When the Federal Open Market Committee (FOMC) directs that Treasury securities be sold in the open market, this will do which of the following? A)Loosen the money supply B)Increase interest rates on loans to consumers C)Have no impact on lending rates to consumers D)Decrease interest rates on loans to consumers

B

Where can demand deposits, checking accounts, paper currency and coins be found in the money supply? A)M2 only B)M1, M2 and M3 C)M1 and M3 only D)M1 only

B

Which of the following entities is chiefly responsible to conduct U.S. monetary policy and maintain the stability of the financial system? A)Internal Revenue Service (IRS) B)The Federal Reserve Board C)New York Stock Exchange (NYSE) D)Securities and Exchange Commission (SEC)

B

Which of the following has the greatest influence on the money supply within the United States? A)The Internal Revenue Service (IRS) B)The Federal Open Market Committee (FOMC) C)The Depository Trust and Clearing Corporation (DTC) D)The Securities Exchange Commission (SEC)

B

Which of the following is considered to be the order of the stages in a business cycle? A)Contraction, trough, peak, expansion B)Expansion, peak, contraction, trough C)Peak, expansion, contraction, trough D)Trough, contraction, expansion, peak

B

Which of the following points to a general decline in prices occurring during severe recessions and the unemployment rate is rising. A)Stagnation B)Deflation C)Stagflation D)Contraction

B

Which of the following would be associated with loans made to member banks of the Federal Reserve? A)Margin rate. B)Discount rate. C)Prime rate. D)Call loan rate.

B

A customer of a FINRA member firm buys securities on margin. The customer is expected to pay a rate of interest on the margin loan based on which of the following? A)The discount rate B)The prime rate C)The broker call loan rate D)The federal funds rate

C

A weak U.S. dollar leads to more A)U.S. imports and a balance of payments deficit B)U.S. exports and a balance of payments deficit C)U.S. exports and a balance of payments surplus D)U.S. imports and a balance of payments surplus

C

According to the U.S. Commerce Department, the economy is in a recession when a decline in real output of goods and services lasts A)18 months or more B)9 months or more C)6 months or more D)beyond 12 months

C

Certain actions taken by the FRB would likely have the effect of causing interest rates to increase. Which would these be? I.The FOMC buying securities II.Raising the reserve requirements III.Raising the discount rate IV.Raising the prime rate A)I and III B)I and IV C)II and III D)II and IV

C

Different degrees of inflation can impact the economy differently. Which of the following best reflects this? A)High inflation spurs the economy forward by increasing the demand for goods. B)High inflation pushes prices to their highest levels, continuously pushing the economy higher. C)Mild inflation can encourage growth and stimulate the economy. D)Mild inflation can thwart business investments and slow economic growth.

C

During periods of economic decline and contraction, one would expect A)consumer demand to increase B)production to rise C)gross domestic product (GDP) to decrease D)inventories to decrease

C

Economic growth has slowed to a halt with little consumer demand, but prices for goods and services are still rising. This is known as economic A)stagnation B)deflation C)stagflation D)contraction

C

Economists call mild, short-term contractions A)troughs B)depressions C)recessions D)declines

C

If the U.S. dollar is relatively strong against the Japanese yen, it can be assumed that A)the U.S. dollar will buy fewer goods produced in Japan and the Japanese yen will also buy fewer goods produced in the United States B)the U.S. dollar will buy fewer goods produced in Japan, while the Japanese yen buys more goods produced in the United States C)the U.S. dollar will buy more goods produced in Japan, while the Japanese yen buys fewer goods produced in the United States D)the U.S. dollar will buy more goods produced in Japan and the Japanese yen will also buy more goods produced in the United States

C

Match the following statement to the BEST expression: Government should allow market forces to determine prices of all goods and that the federal government should reduce government spending as well as taxes. A)Keynesian Theory B)Socialism C)Supply-side Economic Theory D)Monetarist Theory

C

The Federal Reserve Board (FRB) might impact the money supply by using all of the following EXCEPT A)reserve requirements for member banks B)discount rate C)prime rate D)buying or selling securities in open market

C

The best characterization of how economists view the money supply is A)paper money and coinage only B)savings and checking accounts and all lines of credit but not paper money or coins C)cash, loans, different forms of credit, and other liquid instruments D)all forms of cash and liquid instruments but no forms of credit

C

The country's annual economic output of all of the goods and services produced within the nation, is known as A)Indicators B)Expansion C)Gross domestic product D)Balance of payments

C

The flow of money between the United States and other countries is known as A)the surplus B)the payment reserves C)the balance of payments D)the balance of trade

C

The prime rate is set by A)the Securities and Exchange Commission B)the Federal Open Market Committee C)individual banks D)the Federal Reserve Board

C

The rate that commercial money center banks charge each other for overnight loans is A)the prime rate B)the discount rate C)the federal funds rate D)the broker call loan rate

C

Tighter credit will A)slow economic expansion, fueling inflation B)stimulate the economy, preventing expansion C)slow economic expansion, preventing inflation D)stimulate the economy, fueling expansion

C

To contract the overall economy, the Federal Reserve Board, acting as agent for the U.S. Treasury department, will A)buy securities via open-market operations, pushing interest rates up B)sell securities via open-market operations, pushing interest rates down C)sell securities via open-market operations, pushing interest rates up D)buy securities via open-market operations, pushing interest rates down

C

When a bank lends money to a broker-dealer for the purpose of lending to margin account customers, the bank is lending at which of the following rates? A)Federal funds B)Prime C)Broker call loan D)Discount

C

When the Federal Open Market Committee (FOMC) directs that Treasury securities be purchased in the open market, this will do which of the following? A)Increase interest rates on loans to consumers B)Tighten the money supply C)Lower interest rates on loans to consumers D)Have no impact on lending rates to consumers

C

When the Federal Open Market Committee (FOMC) directs that Treasury securities be sold in the open market, this A)is intended to hinder contraction of the money supply B)increases the supply of money C)decreases the money supply D)stabilizes the money supply

C

When the demand for money exceeds the supply, A)interest rates rise, making consumer borrowing easier B)interest rates fall, making consumer borrowing more difficult C)interest rates rise, making consumer borrowing more difficult D)interest rates fall, making consumer borrowing easier

C

When the supply for money exceeds the demand, A)interest rates rise, making consumer borrowing easier B)interest rates fall, making consumer borrowing more difficult C)interest rates fall, making consumer borrowing easier D)interest rates rise, making consumer borrowing more difficult

C

Which benchmark interest rate indicates the direction of the Federal Reserve Board's monetary policy? A)The broker call loan rate B)The federal funds rate C)The discount rate D)The prime rate

C

Which of the following benchmark interest rates is considered a barometer of the direction of short-term interest rates? A)Prime rate B)Broker call loan rate C)Federal funds rate D)Discount rate

C

Which of the following can encourage economic growth because gradually increasing prices tend to stimulate business investment? A)Deflation B)Stagnation C)Mild inflation D)High inflation

C

Which of the following is the rate of interest charged by the Federal Reserve Bank (FRB) for short-term loans to its member banks? A)The broker call loan rate B)The prime rate C)The discount rate D)The federal funds rate

C

Which of the following organizations engaging in open-market operations acts as agent for the U.S. Treasury Department? A)The U.S. Congress B)The Securities Investors Protection Corporation (SIPC) C)The Federal Reserve Board (FRB) D)The Securities and Exchange Commission (SEC)

C

A bank is likely to do which of the following when the Federal Reserve Board (FRB) tightens the money supply? A)Lower its broker call loan rate. B)Lower its prime rate. C)Raise the hypothecation loan rate. D)Raise its prime rate.

D

According to economists which of the following is the correct characterization of the money supply? A)M1 includes all of M2 and M3. B)M2 equals M1 plus M3. CM1 plus M2 equals M3. D)M3 includes all of M1 and M2.

D

All currency held by the public, including coins, checking accounts plus time deposits of less than $100,000, and money market mutual funds, is what economists define as A)M3 B)M1 C)the money supply D)M2

D

Considered the most volatile of the benchmark interest rates in the economy would be A)the broker call loan rate B)the prime rate C)the discount rate D)the federal funds rate

D

For those who follow monetary theory, which is the most complete measure of the money supply? A)M1 B)M2 C)M1 + M2 D)M3

D

If large money center commercial banks begin to lower their prime rates, which of the following is most likely to occur? A)Smaller banks will need to increase their lending rates for creditworthy corporate customers. B)Smaller banks will need to offset the lower prime rate by increasing the broker call loan rate. C)Smaller banks will follow by lowering the discount rate. D)Smaller banks will lower lending rates for creditworthy corporate customers as well.

D

If the U.S. dollar is weak against foreign currency, A)U.S. currency buys more foreign goods; therefore, U.S. exports will increase B)U.S. currency buys less foreign goods; therefore, U.S. imports will increase C)foreign currency buys more U.S. goods; therefore, U.S. imports will increase D)foreign currency buys more U.S. goods; therefore, U.S. exports will increase

D

In what order do the following economic phases typically occur? I.Recovery II.Trough III.Decline IV.Prosperity A)II, I, III, IV B)III, IV, I, II C)IV, III, I, II D)I, IV, III, II

D

Match the following statement to the BEST term: Government intervention in the economy is a significant force in creating prosperity by engaging in activities that affect aggregate demand. A)Socialism B)Balance of payments C)Monetarist Theory D)Keynesian Theory

D

Recent reports indicate that the gross domestic product (GDP) has been declining steadily over the past 2 quarters. This would suggest A)an inflationary period B)an economic expansion C)a depression D)a recession

D

Reports of rising inventories generally occur during which period of the business cycle? A)Peak B)Expansion C)Recovery D)Contraction

D

Several months of slow economic growth and rising unemployment have characterized the economy. Market analysts would describe this as a period of A)stagflation B)inflation C)deflation D)stagnation

D

Stagnation in the economy can be associated with A)prolonged periods of healthy economic growth B)plentiful employment opportunities C)robust production D)high unemployment

D

The Federal Reserve Board (FRB) does all of the following EXCEPT A)regulate and impact the money supply B)determine monetary policy C)supervise the printing of currency D)enact fiscal policy

D

The interest rate negotiated for an uncollateralized overnight loan between 2 money center banks is known as A)the repo rate B)the discount rate C)the prime rate D)the federal funds rate

D

The largest component of the U.S. balance of payments is A)exports B)imports C)foreign currency D)the balance of trade

D

The rate at which banks lend to broker-dealers for the purpose of lending money for margin loans is typically A)notably above (several percentage points) other short-term lending rates B)slightly below (a percentage point or so) other short-term lending rates C)notably below (several percentage points) other short-term lending rates D)slightly above (a percentage point or so) other short-term lending rates

D

There are 2 distinctive types of policies implemented to shape and mold the U.S. economy. They are A)federal and municipal B)supply and demand C)corporate and governmental D)monetary and fiscal

D

To contract or slow economic growth U.S. fiscal policy should be to A)cut taxes and increase government spending for programs and development B)cut taxes and government spending for programs and development C)raise taxes and government spending for programs and development D)raise taxes and cut government spending for programs and development

D

To expand the overall economy, the Federal Reserve Board, acting as agent for the U.S. Treasury department, will A)sell securities via open-market operations, pushing interest rates down B)sell securities via open-market operations, pushing interest rates up C)buy securities via open-market operations, pushing interest rates up D)buy securities via open-market operations, pushing interest rates down

D

To tighten its monetary policy, making it more difficult for consumers to borrow money, the Federal Reserve Board can A)lower the discount rate B)lower the federal funds rate C)raise the federal funds rate D)raise the discount rate

D

When the economy shows high unemployment and is failing to expand as measured by a lack of consumer demand and business activity, but prices for goods and services are still rising, this could be described as what? A)Stagnation B)Inflation C)Deflation D)Stagflation

D

When the money supply in the economy increases, A)interest rates go up, hence borrowing and spending for consumers is easier B)interest rates go up, hence borrowing and spending for consumers is more difficult C)interest rates go down, hence borrowing and spending for consumers is more difficult D)interest rates go down, hence borrowing and spending for consumers is easier

D

Which of the following are considered tools used to implement fiscal policies? I.Government spending II.Operations of the FOMC III.Changing the reserve requirements IV.Taxation A)II and III B)I and III C)II and IV D)I and IV

D

Which of the following correctly states the impact of open-market operations taken by the Federal Reserve Board (FRB)? A)By selling securities, the FRB puts money into the banking system, expanding the money supply and reducing interest rates. B)By buying securities, the FRB takes money out of the banking system, expanding the money supply and increasing interest rates. C)By selling securities, the FRB takes money out of the banking system, expanding the money supply and increasing interest rates. D)By buying securities, the FRB puts money into the banking system, expanding the money supply and reducing interest rates.

D

Which of the following interest rates do large U.S. money center commercial banks charge their most creditworthy corporate borrowers for unsecured loans? A)Federal funds rate B)Discount rate C)Broker call loan rate D)Prime rate

D

Which of the following refers to prolonged periods of slow or little economic growth, unusually accompanied by high unemployment? A)Stagflation B)Deflation C)Trough D)Stagnation

D

Within the money supply, which of the following are part of M2 but NOT M1? A)Checking accounts at commercial banks B)Demand deposits at S&Ls C)Currency in circulation D)Money market mutual funds

D