Question

31. When inflation occurs, a. all families are spending more money on food b. all prices are rising c. oil prices are increasing d. the average level of prices is rising

34. The agent responsible for borrowing on behalf of the government when the budget is in deficit is a. the Treasury b. the Fed c. the Congress d. the Budget office

35. Which of the following best describes the meaning of a 5% rate of inflation? a. All prices increased b. The purchasing power of money increased by 5% c.A weighted average of the prices of goods and services bought by a typical consumer went up 5% d. B and C

37. Commodity money a. can be used to purchase commodities, but not services. b. has little to no value independent of its use as money. c. is backed by a valuable commodity such as gold. d. has value independent of its use as money

38. Shares of stock are traded in the a. bond market. b. capital market. c. money market. d. commodities market.

39. Which of the following is true? a. Primary markets allow original buyers to sell securities before they mature. b. Secondary markets make securities more liquid. c. Secondary markets make securities less liquid. d. Both (A) and (B) above.

Answer 1

31. b. All prices are rising.

Because if inflation oil prices rises and even average price level also increases. So all these things are included in all prices are rising.

34. b The fed

Fedral Reserve band borrows on behalf of government in USA.

37. c. Is backed by a value of commodity such as gold.

Commodity money is money dependent on the commodity it is made up of.

38. b. Capital market

As treasury bill, commercial paper etc are traded in money market. Commodities like gold , silver , crude oil etc are traded in commodity market.

39. d. Both A and B

We can trade in secondary market thats tha it is more liquid. Original buyers can sell in primary market.