ECON 331 chapter 1-7 Definitions and Practice
MCQs Money and Banking Concordia
University (best for 25th Feb Sunday exam
2024)
, lOMoARcPSD|10754654
• Asset- A financial claim or piece of property that is a store of value.
• Aggregate price level; The average price of goods and services in an
economy.
• Aggregate output; The total production of final goods and services in
an economy.
• Aggregate income: The total income of factors of production (land,
labour, capital) in an economy.
• Bank of Canada: Canada’s central bank
• Banks: Financial institutions that accept money deposits and make loans
(such as commercial banks, trust and mortgage loan companies, and
credit unions and caisses populaires).
• Bond: A debt security that promises to make periodic payments to the
holder
for a specified period of time.
• Budget deficit: Government expenditures in excess of tax revenues.
• Budget surplus: Tax revenues in excess of government expenditures.
• Business cycles: The upward and downward movement of aggregate
output
produced in an economy.
• Central bank; The government agency that oversees a country’s banking
system and is responsible for the amount of money and credit supplied in
the economy; in Canada, the Bank of Canada.
• Common stock: A security that is a claim on the earnings and assets of a
company.
• E-finance: A new means of delivering financial services electronically.
• Financial crisis: A major disruption in financial markets that is characterized
by sharp declines in asset prices and the failures of many financial and
nonfinancial firms.
• Financial innovation: The introduction of new types of financial products in
an economy.
• Financial Intermediaries: Institutions (such as banks, insurance companies,
mutual funds, pension funds, and finance companies) that borrow funds
from people who have saved and then make loans to others.
, lOMoARcPSD|10754654
• Financial Markets: Markets in which funds are transferred from people who
have a surplus of available funds to people who have a shortage of
available funds.
• Fiscal policy: Policy that involves decisions about government spending and
taxation.
• Foreign Exchange market: The market in which exchange rates are
determined.
• Foreign exchange rate (exchange rate): The price of one currency stated
in terms of another currency.
• Gross Domestic Product(GDP): The value of all final goods and services
produced in the economy during the course of a year.
• Inflation: The economic condition of a continually rising price level.
• Inflation rate: The rate of change of the price level, usually measured as a
percentage change per year.
• Interest rate: The cost of borrowing or the price paid for the rental of
funds (usually expressed as a percentage per year)
• Monetary policy: The management of the money supply and interest rate.
• Monetary Theory: The theory that relates changes in the quantity of
money
to changes in economic activity.
• Money (Money supply): Anything that is generally accepted as payment
for goods or services or in the repayment of debts.
• Recession: A period during which aggregate output is declining.
• Security: A claim on a borrower’s future income that is sold by the borrower
to the lender. Also called a financial instrument.
• Stock: A security that is a claim on the earnings and assets of a company.
• Unemployment rate: The percentage of the labour force not working.
• adverse selectionThe problem created by asymmetric information prior to
a
financial transaction: the party that is the most undesirable from the other
party’s point of view is the one who is most likely to want to engage in the
financial transaction.
• Asset Transformation: The process of turning risky assets into safer assets,
accomplished by creating and selling assets with risk characteristics that
people are comfortable with and then using the funds acquired by selling
these assets to purchase other assets that have far more risk.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller smartzone. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.99. You're not tied to anything after your purchase.
