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Questions and Answers
Which of the following functions of money encourages specialization in the production of goods and services?
Which of the following functions of money encourages specialization in the production of goods and services?
- Store of value
- Standard of deferred payment
- Medium of exchange (correct)
- Unit of account
According to the liquidity premium theory of the term structure of interest rates, what is the key assumption about bonds of different maturities?
According to the liquidity premium theory of the term structure of interest rates, what is the key assumption about bonds of different maturities?
- They have different risk levels
- They are perfect substitutes (correct)
- They are issued by different entities
- They have fixed interest rates
Which monetary asset is likely to be the least liquid?
Which monetary asset is likely to be the least liquid?
- Savings accounts
- Money market funds
- Funds held as certificate of deposits (correct)
- Cash
Which of the following is NOT a financial intermediary?
Which of the following is NOT a financial intermediary?
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What determines the amount of dividends paid to stock owners?
What determines the amount of dividends paid to stock owners?
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