Investing and Financial Markets Answers

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Bank deposits help the nation’s economy by

A
providing protection for consumers from theft.
B
giving banks the money to loan and invest.
C
providing protection for banks on investments.
D
giving consumers the ability to save money.
3
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Read the graph about mortgage interest rates and housing starts between 1978 and 1983.A conclusion that can be drawn from both graphs by looking at 1983 is that interest rates

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A
dropped, which led to more home starts.
B
peaked, while home starts bottomed out.
C
climbed, which led to fewer home starts.
D
bottomed out, while home starts peaked.
4

Banks pay interest to customers through a

A
savings account.
B
credit card account.
C
mortgage account.
D
401k account.
5

The main role of banks in the nation’s economy is to

A
store, lend, and invest money.
B
store, lend, and borrow money.
C
store, lend, and distribute money.
D
store, lend, and approve money.
6

Which statement best describes the effects of low and high interest rates on the economy?

A
Low interest rates encourage consumers to borrow and spend, while high interest rates encourage saving.
B
High interest rates discourage consumers from investing, while low interest rates encourage investment.
C
High interest rates encourage consumers to borrow and spend, while low interest rates encourage saving.
D
Low interest rates encourage consumers to invest, while high interest rates discourage investment.
7

Which is the correct order of entities that benefit when banks make a profit?

A
employees, shareholders, and the economy
B
shareholders, shoppers, and the economy
C
employees, companies, and the economy
D
shareholders, companies, and the economy
8

Which example best describes how a bank injects money into the economy?

A
A bank opens a savings account for a customer.
B
A bank approves a loan for a customer.
C
A bank buys a company’s rapidly growing stock.
D
A bank buys property in a bustling business district.
9

Which banker would a software company most likely visit for help to raise large amounts of capital to acquire, or buy out another company?

A
a community banker
B
an investment banker
C
a commercial banker
D
an executive banker
10

Read the graph that displays mortgage interest rates between 1978 and 1983.In what year did consumers get the best deal on a mortgage?

Question illustration
A
1978
B
1980
C
1982
D
1983

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