Exam 1: Why Study Money, banking, and Financial Markets

Everything else held constant,a decrease in the value of the dollar relative to all foreign currencies means that the price of foreign goods purchased by Americans

An increase in stock prices ________ the size of people's wealth and may ________ their willingness to spend,everything else held constant.

Between 1950 and 1980 in the U.S.,interest rates trended upward.During this same time period,

Compared to interest rates on long-term U.S.government bonds,interest rates on three-month Treasury bills fluctuate ________ and are ________ on average.

If the CPI is 120 in 1996 and 180 in 2002,then between 1996 and 2002,prices have increased by

Which of the following is most likely to result from a stronger dollar?

An increase in interest rates might ________ saving because more can be earned in interest income.

________ policy involves decisions about government spending and taxation.

If real GDP grows from $10 trillion in 2002 to $10.5 trillion in 2003,the growth rate for real GDP is

From 1980 to early 1985 the dollar ________ in value,thereby benefiting American ________.

If ten years ago the prices of the items bought last month by the average consumer would have been much higher,then one can likely conclude that

If your nominal income in 1998 is $50,000,and prices increase by 50% between 1998 and 2011,then to have the same real income,your nominal income in 2011 must be

The stock market is important because it is

A share of common stock is a claim on a corporation's

The Dow reached a peak of over 11,000 before the collapse of the ________ bubble in 2000.

The management of money and interest rates is called ________ policy and is conducted by a nation's ________ bank.

Well-functioning financial markets promote

The upward and downward movement of aggregate output produced in the economy is referred to as the

On ________,October 19,1987,the market experienced its worst one-day drop in its entire history with the DJIA falling by 22%.

If the price level increases from 200 in year 1 to 220 in year 2,the rate of inflation from year 1 to year 2 is