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

When prices are measured in terms of fixed (base-year)prices they are called ________ prices.

When in 1985 a British pound cost approximately C$1.30,a Shetland sweater that cost 100 British pounds would have cost $130.With a weaker Canadian dollar,the same Shetland sweater would have cost ________.

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

The most comprehensive measure of aggregate output is ________.

A common stock ________.

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

Everything else held constant,a stronger Canadian dollar benefits ________ and hurts ________.

If the CPI in 2012 is 200,and in 2013 the CPI is 180,the rate of inflation from 2012 to 2013 is ________.

________ policy involves decisions about government spending and taxation.

Well-functioning financial markets promote ________.

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 ________.

Countries with low inflation rates include ________.

Financial innovation can lead to ________ and ________.

________ theory relates changes in the quantity of money to changes in aggregate economic activity and the price level.

Complete Milton Friedman's famous statement,"Inflation is always and everywhere a ________ phenomenon."

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

It is true that inflation is a ________.

If the CPI is 120 in 2002 and 180 in 2012,then between 2002 and 2012,prices have increased by ________.

When the total value of final goods and services is calculated using current prices,the resulting measure is referred to as ________.

From 1973 to 1986,the Canadian dollar ________ in value,thereby benefiting Canadian ________.