In general, there are three primary ways that governments can raise money: Taxation –they legally require their citizens to hand it to them under the threat of coercion. Borrowing–they request an amount of money and issue bonds to those who give it to them, promising to repay the money with some amount of interest.
Which action can the government take to raise money quizlet?
Which of the following actions can the government take to raise money? Issue bonds .
Which most accurately explains why fiat money differs from commodity money?
Which most accurately explains why fiat money differs from commodity money? ... Fiat money has value because it is a precious metal such as gold . Fiat money only has value as a medium of exchange. Fiat money has value because it enables the barter system to work.
Which of the following policy actions by the Fed is likely to increase the money supply?
The Fed can increase the money supply by lowering the reserve requirements for banks , which allows them to lend more money. ... The Fed can also alter short-term interest rates by lowering (or raising) the discount rate that banks pay on short-term loans from the Fed.
Which accurately describes the relationship between commodity money and fiat money?
Which statement accurately describes the relationship between commodity money and fiat money? Commodity money has value in itself while fiat money has value only because it is given value . ... The Federal Reserve Bank can buy and sell Treasury bonds to raise or lower bank deposits.
Which of the following is a disadvantage of debt financing quizlet?
A disadvantage of debt financing is that creditors often impose covenants on the borrower . A factor is a restriction lenders impose on borrowers as a condition of providing long-term debt financing. You just studied 15 terms!
On which does technical analysis of a company’s stock focus?
Technical analysis is a blanket term for a variety of strategies that depend on interpretation of price action in a stock. Most technical analysis is focused on determining whether or not a current trend will continue and, if not, when it will reverse .
Which most accurately explains why commodity money has value?
Commodity money only has value because the government declares that it has value . Commodity money only has value because it functions as an efficient medium of exchange. Commodity money is a good that can be used as a medium of exchange or for some other purpose.
In which market is money bought and sold using other types of money?
A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold.
Which function of money represents a measure for stating the prices of goods and services?
Medium of Exchange : When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. Unit of Account: It is a standard numerical unit of measurement of market value of goods, services, and other transactions.
What are the 3 tools of monetary policy?
The Fed has traditionally used three tools to conduct monetary policy: reserve requirements, the discount rate, and open market operations . In 2008, the Fed added paying interest on reserve balances held at Reserve Banks to its monetary policy toolkit.
Which of the following will increase the money supply?
Decrease in cash reserve ratio .
Who regulates the money supply?
The Federal Reserve System manages the money supply in three ways: Reserve ratios. Banks are required to maintain a certain proportion of their deposits as a “reserve” against potential withdrawals. By varying this amount, called the reserve ratio, the Fed controls the quantity of money in circulation.
Which accurately describes the requirements banks must meet?
Which accurately describes the requirements banks must meet under a fractional reserve banking system? Banks must keep a specific percentage of deposits on hand. Banks must pay a specific fraction of their assets in taxes. Banks reserve the right to raise interest rates at any time.
Which is traded in a commodity market?
A commodity market involves buying, selling, or trading a raw product, such as oil, gold, or coffee . There are hard commodities, which are generally natural resources, and soft commodities, which are livestock or agricultural goods.
Which describes the type of exchange that doesn’t use money?
Bartering is the exchange of goods and services between two or more parties without the use of money. It is the oldest form of commerce. Individuals and companies barter goods and services between each other based on equivalent estimates of prices and goods.
