AP Macro- Unit 4

Front

Which of the following is true for bonds but not stocks?
Bonds are the least liquid form of assets
Bonds represent partial ownership in a company
Bonds earn variable rates of return
Bonds are interest bearing assets

Back

Bonds are interest bearing assets

Front

Which of the following is considered the most liquid asset? Stocks, Bonds, Currency, Real Estate

Back

Currency

Front

Which of the following is true regarding financial assets? Bond prices increase when interest rates increase, Checkable deposits are not a medium of exchange because they have low liquidity, Money serves as a medium of exchange, unit of account, and a store of value, Bonds are also called equities and represent ownership in a corporation

Back

Money serves as a medium of exchange, unit of account, and a store of value

Front

Which of the following statements describes a function of money? I. Money is a medium of exchange. II. Money is a store of value. III. Money is a unit of account. IV. Money is a factor of production.

Back

I, II, and III only.

Front

If the expected inflation rate increases, what will happen to Sam's payments on a five-year fixed interest rate auto loan?

Back

Sam will pay a lower real interest rate.

Front

Fiat Money

Back

performs the function of money but has no other value or uses

Front

Commodity Money

Back

performs the function of money and has intrinsic value

Front

Liquidity

Back

ease with which an asset can be accessed and used as a medium of exchange

Front

A Store of Value

Back

allows you to store purchasing power for the future

Front

The M1 category of money supply is best described as...

Back

Liquid assets