Week 4 - Money, Banking, & Finance

pg 248 #s 1-5., 1.How dose money serve as store of vale? 3.Why dose United States currency have value ? 4.What are the disadvantages of commodity money 5.Why did continents become worthless.

pg 248 #s 1-5, 1.Something that keeps its value if it stored rather than used 3.Economics define money in terms of its three uses money is anything that serves as a medium of exchange a unit of account and store of vale. 4.Objects that have value in and of themselves and that are also used as money 5.People come to believe that they would not be able to redeem their bills for gold and silver

pg 254.,What dose the chart suggest about the role government in banking during the twentieth century.

pg 254.,The history of America banking a series of shifts between stability and instability.

pg 256.,What dose the cartoonist suggest about the large number of recent bank mergers.

pg 256., Last UN-merged bank & trust

pg 257., 1.In your own words summarize Amedo Gainninis ideas about a banks function and role in society. 2.How dose the establishment of knew benches benefit both a bank and the public?

pg 257., 1.1904 Gainninis opened the bank of Italy in San Francisco's heavenly Italy North beach section. 2.In 1918 the bank of Italy had expended across California becoming the first bank in america with a statewide system of branches,.

pg 260.,Why dose the bank retain a percentage of the money it receives from deposit.

pg 260.,In a fractional reserve system banks keep only a fraction of founds on hands and lend out the rest. The funds lent out fuel the economy and ensure continued growth.

pg 261.,How many years dose it take for the original deposit to double.

pg 261.,This chart shows the money earned on a $100 deposit when interest is compound yearly at 5 percent.

pg 262.,What are the sources of a bank's income?

pg 262.,A bank is a business organisation engaged in the business of borrowing and lending money. A bank can earn income only if it borrows at a lower rate and lends at a higher rate. The difference between the two rates will represent the costs incurred by the bank and the profit.

pg 264.,What is the difference between M1 and M2?

pg 264., *M1, 1. the narrowest definition of the money supply 2. includes currency, checking account balances, and traveler's checks *M2,1. includes everything that is in M1, plus savings accounts, small-denomination time deposits (such as certificates of deposit (CDs)), money market deposit accounts in banks, and noninstitutional money market fund shares.

pg 268., #'s 1-4 1.according to Randall Dodd, how do fraud and manipulation of market prices hurt the economic

pg 268., #'s 1-4 1. fraud and the manipulation of market prices rob investors of a fair return on their money and this discourages of fair return on their money and this discourages investments and harms the entire economy.

pg 273.,What advantages do financial intermediaries provides provide for servers.

pg 273.,Financial intermediates including banks and other financial instructions accept funds from savers and mame loans to investors. Investors include entrepreneurs businesses and other borrowers.

pg 278.,How do interest rates affect bond price.

pg 278.,Investors can earn money by buying bonds at a discount called a discount from par

pg 279.,What bond carries the last risk.

pg 279 The buyer bond of the BBB bond trades greater risk for higher interest rate.

pg 284 .,#1 & 2, 1, What information does this table give you for each year. 2.In witch year did the U.S economy grow most quickly?

pg 284., #1 & 2, 1, The table below list the rate of growth of gross Domestic product each year from 1996 to 2002. 2. 1997.

pg 287.,Which of the companies listed pays the highest dividend.

pg 287.,many corporations pay out part of their porfits as dividends to their stockholders.

pg 291.,What dose the cartoonist suggest about investors in the 1990's who assumed that the stock market would only keep climbing.

pg 291., When the stock market dropped i had a moment of understanding.

pg 292., #s 1-4, 1.What are tow benefits and tow risk of buing stock 2.Identify two stock changes and describe the difference between them. 3.Describe two popular indexes of stock performance 4.What were three causes of the great crash.

pg 292 .,#s 1-4, 1.Two benefits of buying stock are dividends and capital gains. Dividends are usually paid four times a year and allow stockholders to make a profit. Capital gains are another way stockholders make a profit. Two risks of buying stock include lower profits than expected, and the loss of money. 2.Two stock exchanges are The New York Stock Exchange, which handles only the largest companies' stocks, and The Nasdaq, which trades the stocks electronically. 3.The Dow Jones and The S&P 500 4. Expansion of the money supply (fueled by easy credit policies of the Federal reserve) that led to an unsustainable credit driven boom in the 1920s.Eventually, credit was going to be tightened and stock prices would crash as investors were unable to borrow money cheaply to buy stocks.

pg 293.,#s 1-2 1.Why did the intentional success of dot -coms make it easier for other dot-com companies to get started. 2.What mite a dot-com entrepreneur have done to avoid the boom and bust cycle that many technology stocks expierinced

pg 293.,#s 1-2 1.The dot-coms are companies that sprang up to take advantage of the potential business opportunities offered relating to internet. 2.Realistic look at the inherent profitability of the business plan of a start-up. In other words, imitate Warren Buffet.