Deck 1: Functions and Roles of the Financial System in the Global Economy

Question 1

A major problem faced by Japan today is too much saving by its citizens.

Answer 1

True

Question 2

A major problem faced by Japan today is too little saving by its citizens.

Answer 2

False

Question 3

The U.S. savings rate is one of the lowest among major industrial nations because of the:

A) High proportion of young adults in the U.S. population
B) Large government budget deficits
C) Tax structure which favors consumption and borrowing over savings
D) All of the above
E) None of the above

Answer 3

All of the above

Question 4

In early 2006, more than $55 trillion in securities, deposits and other financial assets were held by domestic nonfinancial businesses, households and governments in the United States and represents their financial wealth. After subtracting the total debt owed by these groups, it leaves us with the net financial wealth of:

A) $12 trillion
B) $15 trillion
C) $20 trillion
D) $30 trillion
E) $75 trillion

Question 5

In early 2006 it appeared that the annual US gross domestic product (GDP) would be around $11.5 trillion. What percentage of the GDP is saved?

A) 5%
B) 12%
C) 17%
D) 22%
E) 25%

Question 6

Projections for 2006 indicated that personal savings for the year would be:

A) $400 billion
B) -$215 billion
C) $45 billion
D) -$45 billion
E) $32 billion

Question 7

Every year the volume of financial wealth is growing in the United States. In 2006 the total securities, deposits and other financial assets held by domestic nonfinancial businesses, households, the US government and foreign investors was

A) $55 trillion
B) $66 trillion
C) $11 trillion
D) $50 trillion
E) None of the above

Question 8

What functions of the financial system do the following transactions illustrate or represent? (Note: Some
transactions may involve more than one function. Be sure to identify all the financial system functions involved in each transaction.)

Question 9

What roles of the global financial system are being described in the items listed below?

Question 10

What roles of the global financial system are being described in the items listed below?

Question 11

What roles of the global financial system are being described in the items listed below?

Question 12

What concept, institution or instrument is described by each of the phrases or sentences listed below?

Question 13

What concept, institution or instrument is described by each of the phrases or sentences listed below?

Question 14

Herman Gleep has built up total assets at the end of last year of $520,000. It consisted off a home valued at $350,000 and financial assets valued at $170,000. During this year his home appreciated by a -4% because of the contracting housing market, but his financial assets achieved a return of 6.5%. What is Herman's overall rate of return this year and what are his total assets worth?

Question 15

What concept, device or instrument is described by each of the phrases or sentences listed below?