UNIT1Q

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.

Supply-side Economic Theory

cash, loans, different forms of credit, and other liquid instruments

The best characterization of how economists view the money supply is

lower the discount rate lower the reserve requirement buy U.S. government securities in open-market operations

To stimulate the economy during a recession by expanding the availability of credit, the FRB would do any of the following

The Securities Act of 1933 requires that all of the following be offered by a prospectus EXCEPT:

Treasury bonds.

Securities to be sold within a state require registration at the state level. States have 2 ways to register (or blue sky) securities: coordination and qualification

Under the Uniform Securities Act, states have which of the following 2 ways to register securities to be sold?

During the cooling-off period of a new registration filed with the SEC

a red herring may be given to prospective investors

A clearing corporation agent or depository for securities transactions

can be a commercial bank

U.S. consumers are increasing their imports of foreign-made goods. On this data alone, one might expect gross domestic product (GDP) to

decrease

Economists refer to longer, more severe contractions in the economy as

depressions

The FRB determines monetary policy (not fiscal) and takes actions to implement its policies, including but not limited to regulating the U.S. money supply and supervising the printing of currency.

enact the fiscal policy

Restricted persons are not allowed to purchase an IPO of common stock. All of the following are restricted persons EXCEPT

grandparent of registered person

when the demand for money exceeds the supply,

interest rates rise, making consumer borrowing more difficult

When a firm engages in proprietary trading, buying into and selling out of its own inventory for profit, it is acting a

money maker

In the primary market, securities are sold to the public and the issuer receives the sale proceeds.

primary and secondary markets, which of the following is TRUE

Securities sold in an issuer-related transaction would best be described as

primary offering

Broker-dealers that transact securities business with customers or other broker-dealers must apply and be approved for registration with

sec

The rate at which banks lend to broker-dealers for the purpose of lending money for margin loans is typical

slightly above (a percentage point or so) other short-term lending rates

Implementing monetary policy, and thereby undertaking the responsibility to maintain the stability of the U.S. financial system, is

the Federal Open Market Committee (FOMC)

Federal Reserve member banks needing to borrow money can borrow from

the Federal Reserve Bank at the discount rate.

Certain actions taken by the FRB would likely have the effect of causing interest rates to increase. Which would these be?

-Raising the reserve requirements -Raising the discount rate

The SEC review or cooling-off period must last a minimum of... the SEC releases the securities for sale to the public (effective date). Solicitations and the acceptance of orders may never occur before the effective date.

20 days before

A company that offers sales of another company's securities would BEST be described as a(n)

A broker-dealer (investment banker) that works with an issuer to bring the issuer's securities to the market by offering the securities for sale to investors is best described in this context as an underwriter

Anytime proceeds are going to the selling shareholders rather than the issuer, it is a secondary offering. In this example, the shares are being offered to the investing public for the first time, which makes the offering an IPO (initial public offering).

A company is going public for the first time. Because it is already incorporated and has two key stockholders, the proceeds of the shares sold will go to those stockholders. This is

An offering can be a combination of primary and secondary. . An APO is a primary offering.

Regarding primary and secondary offerings, which of the following are TRUE?

The SEC review or cooling-off period must last a minimum of 20 days before the SEC releases the securities for sale to the public (effective date)

Regarding the issuance of new securities to the public, the..... act of .... includes ....penilties

Securities offerings may qualify for exemption from the registration statement and prospectus requirements of the Securities Act of 1933 under Regulation A+, Regulation D, Rule 147 and Regulation S.

Each of the following provides for an exemption from the registration requirement of the Securities Act of 1933

Which of the following organizations was created to protect investors financially from a bank failure?

FDIC

Issuer transactions occur in the primary market, and securities are offered at a public offering price.

For the primary market, which of the following is TRUE?

The country's annual economic output of all of the goods and services produced within the nation, is known as

GROSS DOMESTIC PRODUCT

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

M2

Regarding the registration of securities with the SEC is true?

Private securities offerings are generally exempt from registration.