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

When stock prices fall

What happens to economic growth and unemployment during a business cycle recession? What is the relationship between the money growth rate and a business cycle recession?

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

What is a stock? How do stocks affect the economy?

Banks are important to the study of money and the economy because they

The interest rate on Baa corporate bonds is ________,on average,than interest rates on Treasuries,and the spread between these rates became ________ in the 1970s.

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

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

Stock prices are

Countries that experience very high rates of inflation may also have

American farmers who sell beef to Europe benefit most from

From 1980 to 1985 the dollar appreciated relative to the British pound. Holding everything else constant,one would expect that,when compared to 1980

Everything else held constant,an increase in interest rates on student loans

Banks,savings and loan associations,mutual savings banks,and credit unions

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

Everything else held constant,a decline in interest rates will cause spending on housing to

GDP measured with constant prices is referred to as

________ theory relates the quantity of money and monetary policy to changes in aggregate economic activity and inflation.

Financial institutions that accept deposits and make loans are called

The decline in stock prices from 2000 through 2002