Monetary Policy and Business Financing Flashcard

Front

Discuss the nature of monetary policy and the role of the Federal Reserve System. What is the primary function of the Federal Reserve System? Options: To create laws for businesses, To regulate financial institutions and manage monetary policy, To set the prices of goods and services, To oversee foreign exchange markets

Back

To regulate financial institutions and manage monetary policy

Front

Discuss the nature of monetary policy and the role of the Federal Reserve System. The Federal Reserve's primary tool for controlling the economy is: Changing tax rates, Adjusting interest rates, Passing laws to regulate businesses, Printing money without limits

Back

Adjusting interest rates

Front

Discuss the general methods of financing business ventures and various sources of financing. A business venture can be financed by:

Back

Borrowing money, equity investment, or using revenue

Front

What is equity financing?

Back

Selling shares of ownership in the company

Front

Develop, evaluate, and modify a spending/savings plan. A spending plan is important because:

Back

It helps track income and expenses to avoid overspending, ensures money is saved for future emergencies, and promotes long-term financial stability.

Front

Develop, evaluate, and modify a spending/savings plan. What is a good strategy when developing a savings plan?

Back

Set realistic goals and prioritize savings

Front

A budget is useful for:

Back

Tracking spending and controlling finances

Front

The first step in preparing a budget is to:

Back

Calculate your total income

Front

Which of the following is a proper procedure for managing a checking account?
Options:
Writing checks without recording them in the check register,
Balancing your check register monthly to ensure accuracy,
Keeping your checkbook with no regard to bank statements,
Using a debit card without tracking purchases

Back

Balancing your check register monthly to ensure accuracy

Front

What is an electronic funds transfer (EFT)?

Back

A transaction where money is transferred electronically between accounts.