Chapter 19 - Economic Factors Flashcards
What is the effect of raising the minimum reserve requirement?
Decreases the money supply and tightens credit.
For collateralized loans they make to broker-dealers (for margin purposes), commercial banks charge the _____ rate.
call
The Federal Reserve Board will _____ securities to increase the money supply and ease credit.
buy
Economic theory stating that government intervention in the economy is necessary for sustained economic growth.
Keynesian
The rate of interest banks charge each other on overnight loans.
The fed funds rate
The rate that banks charge their most creditworthy corporate clients.
Prime Rate
Stocks of companies that have sales and earnings growing faster than the overall economy.
Growth stocks
During periods of easy money when interest rates are declining, yield curves tend to:
slope upward from the shorter to the longer maturities
Money received by a corporation when it sells its stock above its par value is called:
Paid-in capital
During which phase of the business cycle will an investor experience a decrease in purchasing power?
Peak
Which of the following choices is NOT a leading economic indicator? A) Building permits B) Consumer expectations C) Prime rate D) Stock Prices
Prime rate
