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

Are the following transactions included in the calculation of the GDP? Why? a.books you buy from the university bookstore b.purchase of government bonds c.writing a cheque to your dentist for his services d.purchase by a car manufacturer of tyres for the produced vehicles

________ markets transfer funds from people who do not have a productive use for them to people who do.

The average price of goods and services in the economy is called ________.

Channelling funds from individuals with savings to those desiring funds when the saver does not purchase the borrower's security is known as ________.

Financial markets promote economic efficiency by ________.

If your nominal income in 2013 was $30,000,and prices doubled between 2002 and 2013,to have the same real income,your nominal income in 2002 must be ________.

What is the aggregate income? How is the aggregate income related to the gross domestic product?

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

Why is the real GDP a better measure of economic activity than nominal GDP?

On ________,October 19,1987,the market experienced its worst one-day drop in its entire history with the S&P/TSX Composite falling by 11 percent.

The market where one currency is converted into another currency is called the ________ market.

Canadian companies can borrow funds ________.

A budget ________ occurs when government expenditures exceed tax revenues for a particular time period.

Financial crises are characterized by ________.

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 stock market is important because it is ________.

Inflation ________.

During a recession,output declines resulting in ________.

Prior to all recessions,there has been a drop in ________.

Evidence from Canada and other foreign countries indicates that ________.