Economic Factors and Business Information Flashcards
6 cards from real Series 65 – Uniform Investment Adviser Law Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Economic Factors and Business Information flashcards as text
Monetary policy is primarily controlled by which entity in the United States?
Answer: The Federal Reserve
The Federal Reserve (the Fed) is the central bank of the United States and controls monetary policy through tools like interest rates and open market operations.
Which of the following is an example of fiscal policy?
Answer: Congress passing a tax cut
Fiscal policy involves government spending and taxation decisions made by Congress and the executive branch, such as enacting tax cuts.
What does GDP measure?
Answer: Total value of all goods and services produced within a country in a given period
Gross Domestic Product (GDP) measures the total monetary value of all finished goods and services produced within a country's borders in a specific time period.
A company with a current ratio of 2.0 means:
Answer: Its current assets are twice its current liabilities
A current ratio of 2.0 means the company has $2 in current assets for every $1 in current liabilities, indicating good short-term liquidity.
Which type of risk refers to the possibility that a country's political or economic instability will negatively impact investments?
Answer: Country risk
Country risk (also called political or sovereign risk) is the risk that a foreign government's political instability or economic conditions will adversely affect investments.
What is the relationship between inflation and purchasing power?
Answer: Inflation decreases purchasing power
Inflation erodes purchasing power because the same amount of money buys fewer goods and services as prices rise.