Exam 3: Fundamentals of Economics and Types of Markets

ProStar Desks needs to double the size of its fleet of delivery vehicles. Its bank provides the owners with a $500,000 credit to use for their vehicle order. This credit isbest described as

A company with a lot of debt is considered to be heavily leveraged.

Precision Trucking has an outstanding credit rating and decides to approach its bank about financing a new factory it wants to build. The bank agrees to lend money to Precision Trucking over a 15-year period using Precision's fleet of vehicles as collateral. Precision will need to pay monthly installments during the life of the agreement. This agreement is best described as which of the following terms?

Elemental Flags has a three-year loan agreement with its bank. It can borrow anything up to $300,000 and is charged interest on any unpaid balance. Thisbest describes a

________ are bank funds that can't be withdrawn without notice or transferred by check.

Andrei has been hired by his friend Andy to serve as the financial manager for Andy's company. Andy assigns Andrei his first job: evaluating the risk-return trade-off for the company. Help Andrei by defining risk-reward trade-off and provide two examples to help with your explanation.

What is the term for the rate of return a firm must earn to cover the cost of generating funds in the marketplace?

________ consist(s) of funds acquired from wealthy individuals and institutions that invest in promising start-ups or emerging companies in return for their giving up some ownership.

Fine Art Framing wanted to spur business, so it ran a three-month stretch of promotions where customers were given six months with zero interest and no payments. Unfortunately, the company found itself short on money as it waited for payments to roll in, so it was forced to borrow money from the bank to stay in business. Which of the reasons firms borrow money does thisbest demonstrate?

Malik runs a fun center that offers go-karts, mini-golf, and more. He is low on money and offers his soda supplier free tickets to the fun center in exchange for his monthly order of soda. This is an example of

Antanas is tired of living paycheck to paycheck. He tells his friend Irena that he is going to start counterfeiting U.S. currency to help him get rich quick. Irena feels bad but tells him that his plan will most likely fail due to the ________ of money.

Giedre is going on vacation next week and runs to her bank to pick up traveler's checks to use while she is away. These checks arebest described as an example of which part of the money supply?

Money that can be accessed quickly and easily, such as that in a checking account, is called

When Marston's son turned 16, he helped him open an interest-bearing checking account at the local bank. This account canbest be classified as

DeAndre recently took a new job with Macklemore Industries. He is responsible for buying and selling stocks for individuals looking for assistance. Macklemore Industries ismost likely a(n)

A ________ forecast is a prediction about how money will come into and go out of a firm during the next 4 to 12 months.

Dolan's Detailing is purchasing another company in order to obtain the patent to its luxury car cleaning system. A patent is described as a ________ expenditure.

Which of these is a nonbank institution?

A financial plan has three parts: forecasting, budgeting, and

A remote island decides to create its own money using avocados. Considering the five useful benefits of money, why would this be a bad idea?