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You pay your friend $50 in exchange for the awesome shoes she is selling. Your friend puts that $50 into her backpack. Two weeks later she uses the $50 to buy a book for class. This is an example of:
B. What is Store of value
Wendy has tons of tomatoes on her tomato plants to harvest but no time to do it. Claire is trying to save money to go to college next year. Wendy agrees to pay Claire $25 for her work and Claire puts the money in the bank. This illustrates one of the advantages of money over bartering, which is:
What is Money stores value
The Federal Reserve has tools at its disposal to help regulate the financial system. Which tool might they use to help stabilize prices?
What is regulation of interest rates
Good friends Nick, Ricardo and Lauren start a private accounting firm together which they manage and own jointly. Their company may be set up as:
What is a partnership
Although money is really just a fancy piece of paper, it is demanded throughout society. Money is valued for all of the following reasons EXCEPT:
What is easy to counterfeit.
The sink in your kitchen is backed up, you need to have it cleaned out but you have no snake (tool used to clear the drain line) and you really don’t know how to fix the sink other than using Draino (and Draino didn’t work!). Samuel lives next door and owns a plumbing business. You contact Samuel and ask him if he will come clean out your drain line and in exchange you will make him a delicious roast beef dinner. He agrees to the exchange. What type of system have you used in this transaction?
What is A barter system because each person gets something of value.
The Federal Reserve relies on what other tool to conduct monetary policy besides the reserve requirement?
What is discount rate
Julienne owns a medium-sized business. She has decided to keep her business as a private company. This means that Julienne:
What is does not offer shares of the company to the public
In a tiny village, on the coast of South America, early inhabitants used sea shells, as money. Some of these shells were very beautiful and fragile. Everyone agreed that the shells were valuable and the people utilized them in much the same way we use money today. The fragility of the shells and the fact that a shell is difficult to split into smaller denominations would make these sea shells unfit to act as money today because sea shells could not act as a:
What is Medium of Exchange
PayPal is an example of which of the following?
What is mobile commerce
The Federal Reserve has a number of goals including low unemployment, price stability and sustainable economic growth. What does the Fed use to reach these goals?
What is monetary policy tools
The company Alexco just hired a new employee named Joy. As part of her signing bonus, Joy received 20 shares of Alexco stock. Over the year coming year Joy watches the value of her shares go up (and sometimes down) on the NASDAQ. The company, Alexco, must be:
What is a public company
Your company decides to hire a new employee named Philip. Philip makes $40,000 salary for the year. The $40,000 Philip earns is:
What is a measurement of his work’s value to the company.
A business owner decides to take out a bank loan instead of issuing stock in order to raise funds for the business. Why might the owner have made that decision?
What is The current business owner retains complete ownership of the business
The Federal Reserve lowers the reserve requirement from 7 percent to 6 percent. Consequently banks must set aside less money to meet the reserve requirement. They have more money to lend to their customers and are able to lower the rate of interest they charge. These conditions make it less expensive for people and businesses to borrow money. Because they can borrow more, they can spend more. If people are spending more, prices go up. With this action, the Fed has lessened the likelihood of:
What is recession
If you purchase stock in a firm, you become:
What is A shareholder of the firm
Shannon went to the pet store and bought a dog bowl. The bowl cost $15 and Shannon used a $20 bill to pay for the bowl. She received $5 back in change during this transaction. The $15 price of the dog bowl:
What is a precise measurement of the value of the dog bowl.
Beverly’s new fusion restaurant has been in business for 6 months. It is doing great! Each weekend she has more reservation requests than the restaurant can handle. Beverly decides she would like to raise some capital to help the restaurant grow to keep up with the demand. What would be an appropriate choice for Beverly to consider in order to raise that capital?
What is Venture capital firm
Your large business just issued bonds for $10 million. You are excited about utilizing the new funds to expand. As you create your budgets for the upcoming years you need to keep in mind that your company will need to:
What is Pay interest payments annually and repay the entire $10 million at the end of the bond term.
A company receives money from the sale of its stock:
What is at the initial public offering
The barter system is rarely used today because:
What is of the necessity for both parties to want something the other can provide at the same time.
At the end of the week, Carla receives her paycheck and goes directly to the bank after work to make a deposit into her savings account. The bank keeps the required reserve and then loans out the remaining balance to a qualified borrower named Malik as a portion of his small business loan. Malik uses the loan to buy a tractor for his construction business and makes small monthly payments to the bank to payback the principal balance plus interest on the loan. The bank profits from a portion of the interest payment received and also passes some of the interest back to Carla in the form of an interest payment to her savings account. In this example, the bank is acting:
What is As an intermediary between the saver (Carla) and the borrower (Malik).
Bonds are:
What is a formal contract to repay borrowed money with interest at fixed intervals.
As a large well established business you decided you need to raise some capital. What are the primary methods you might consider in order to raise the needed capital?
What is bond markets and stock markets