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Basic Finance Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Which of the following statements is NOT true regarding investment?

Question 2 2. Yvette is risk intolerant and does not want there to be much fluctuation in value for her assets. Which asset would Yvette most likely keep?

Question 3 3. When money can be stored for a length of time and then used later to purchase goods and services, economists say that money is:

Question 4 4. Why was money created?

Question 5 5. The goods markets are the life force of the economy and encompasses all of the following except

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Question 6 6. Which of the following is NOT true regarding the role of banks in the economy?

Question 7 7. Why is it NOT possible to purchase shares of General Motors on the bond market?

Question 8 8. Why is it likely that you will be able to easily trade financial bonds from the money market for cash?

Question 9 9. Which of the following BEST explains the contractual obligation associated with stock?

Question 10 10. What are the main categories of investment?

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Question 11 11. How does the economy change every time banks loan out excess reserves?

Question 12 12. Which of the following lists is in the correct order, from least to most, of the market value of each of these financial assets?

Question 13 13. How does inflation prevent most of the money in use today from serving as a pure store of value?

Question 14 14. What happens when a computer gets produced this year and distributed to a retail store's inventory?

Question 15 15. One of the biggest capital markets is the stock market which is associated with all of the following except

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Question 16 16. How do banks make money?

Question 17 17. The government issues a new two-dollar and fifty cent bill. What is the intrinsic value of the new currency?

Question 18 18. Lydia deposits $70,000 into the First National Bank of Ceelo. The required reserve ratio is 10%. How much will the money supply increase if the bank loans out excess reserves?

Question 19 19. Which of the following insures that the US dollar maintains its value?

Question 20 20. Which of the following statements is the best explanation of how insurance allows a company to manage risk?

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Question 21 21. George reaches into his wallet and pulls out a $20 US bill to pay for his coffee. By using currency to make a purchase, what is George actually doing?

Question 22 22. Which one of the following types of insurance is usually required by law?

Question 23 23. How is investment, in economics, related to spending?

Question 24 24. In economics, the term investment refers to what?

Question 25 25. Which of the following financial assets is a debt instrument - a promise by the issuer to pay the holder their principal plus interest at some future date?

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Question 26 26. Which of the following is an example of a financial market?

Question 27 27. A tornado swept through a city making it difficult for a small business to earn money for some time. What kind of insurance would help to minimize the loss of income?

Question 28 28. Money is a medium of exchange because:

Question 29 29. Assume that there are two parties to an exchange and that they value the goods they would receive as much as the goods they would give away. What do economists call this?

Question 30 30. What does it mean if everything in an economy can be quoted in terms of money?

Basic Finance Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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