BUSN 602 Midterm Exam (American Public University)

BUY: BUSN602 Midterm Exam (American Public University) – SeeTutorials.com

BUSN 602 Midterm Exam (American Public University)

1. As interest rates fall, the prices of existing bonds will:
2. You need to have $35,000 on hand to buy a new Lexus five years from today. To achieve that goal, you want to know how much you must invest today in a certificate of deposit guaranteed to return you 3% per year. To help determine how much to investment today, you will use:
3. If you expect the inflation premium to be 2%, the default risk premium to be 1% and the real interest rate to be 4%, what interest would you expect to observe in the marketplace under the simplest form of market interest rates?
4. The price level of goods and services may be expressed as the ratio of _____________.
5. John deposits $2,000 per year at the end of the year for the next 20 years into an IRA account that pays 6%. How much will John have on deposit at the end of 20 years?
6. The most important savings surplus unit in the economy is:
7. Economists use a ___________________ framework to explain how the prices and quantities of goods and services are determined in a free-market economic system
8. The Second Bank of the United States was created to:
9. The _________ value of a savings or investment is its amount or value at the current time.
10. As interest rates rise, the prices of existing bonds will:
11. Which of the following are not included in M1?
12. Continuing federal programs that stabilize economic activity are called
13. ______________ is the tendency of prices, aided by union-corporation contracts, to rise during economic expansions and resist declines during recessions
14. Identify the three functions of money.
15. The federal government pays for the services it provides primarily through:
16. A saver who chooses securities as a savings medium and desires maximum safety of principal buys:
17. The saving-investment process involves which of the following financial functions:
18. During the early years of the life stage of a typical corporation, the:
19. You need $8,000 four years from now for a down payment on your future house. How much money must you deposit today if your credit union pays 5% interest compounded annually? Pick the closest answer.
20. When investors expect __________ inflation rates they will require __________ nominal interest rates so that a real rate of return will remain after the inflation.