Federal Reserve System and Monetary Policy Quiz Questions
Chapter 4: Federal Reserve and Monetary Policy Questions
US Financial Institutions and Central Bank Functions
1. Fannie Mae and Ginnie Mae Functions
The Federal National Mortgage Association (Fannie Mae) and Government National Mortgage Association (Ginnie Mae):
- issue mortgages directly to consumers.
- provide assistance on down payments to help consumers get into the housing market.
- issue mortgage-backed securities to fund the mortgages that they purchase from financial institutions.
- purchase homes directly
Market Dynamics: Demand Shifts, Supply Changes, and Price Controls
Understanding the Demand Curve
The Law of Demand
If price is on the vertical axis and quantity demanded is on the horizontal axis, the demand curve is downward sloping (left to right).
This slope is the graphical representation of the Law of Demand, which specifies an inverse relationship between price and quantity demanded, ceteris paribus (all other factors held constant).
Movement Along the Demand Curve
- When moving along a specific demand curve, the factor that is not held constant is the price of
The Evolution of Taxation and Optimal Tax Design Principles
History and Evolution of Taxation
Taxation has always been an essential aspect of society, evolving from the simplest systems in ancient civilizations to the intricate frameworks of the modern era. Understanding the history of taxation reveals the intricate relationship between governance, social contracts, and economic systems.
Ancient Beginnings of Taxation (3000 BCE onwards)
Taxes trace their origins to the earliest civilizations, where they were levied as payments in kind rather than monetary forms.
Read MoreUS Economic Transformation: Prosperity, Depression, and Policy
U.S. Economic Expansion and the Roaring Twenties
The U.S. expansion was based on a profound transformation of production dominated by technical innovation. This led to decreased costs, increased production, and higher profits. It was at this time that the use of the telephone, automobile, and household appliances became popularized. Since these devices were expensive, the concept of installment sales was first applied. This created a wave of consumerism, as people could buy products without needing
Read MoreChoosing the Right Legal Form for Your Business Entity
Key Factors in Choosing a Legal Business Form
The choice of legal form depends on several critical factors:
- Distribution of Power: This relates to the degree of involvement desired in the management and administration of the company.
- Type of Financing: Whether capital will be provided solely by one person or by multiple sources.
- Equity Risk (Liability): The level of responsibility the founders are willing to assume regarding their personal assets against company debts.
- Fiscal Cost (Taxation): Different
Global Product Strategy: Standardization, Adaptation, and Intellectual Property Protection
International Product Strategy and Management
Core Product Elements and Market Alternatives
Product Elements
- Installation, delivery, warranty, and after-sales service
- Packaging, features, styling, quality, and brand name
- Core benefit or service
Product Alternatives in International Markets
- Selling the product as is in the international marketplace
- Modifying the product for specific countries
- Designing new products for foreign markets
- Creating a global product