FIN 470 (Dr. Miller)- Exam 1 Study Guide Solutions

FIN 470 (Dr. Miller)- Exam 1 Study Guide Solutions Liquidity - Ans:-the ease with which an asset can be converted into cash 3 functions of money - Ans:-medium of exchange, unit of account, store of value Nominal GDP - Ans:-GDP measured in current prices Real GDP - Ans:-GDP measured in base year prices Paache index - Ans:-Nominal/Real GDP Laspreyes index - Ans:-P1Q0/Nominal GDP in Base Year cyclical unemployment - Ans:-unemployment caused by a recession structural unemployment - Ans:-unemployment resulting from industrial reorganization, typically due to technological change or outsourcing frictional unemployment - Ans:-unemployment that occurs when people take time to find a job or go to school ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 2/3 Who sets the discount rate? - Ans:-Board of Directors Who sets the Reserve Requirement? - Ans:-Board of Governors Who conducts Open Market Operations? - Ans:-FOMC What is the composition of the Federal Open Market Committee (FOMC)? - Ans:-7 board of governors and 5 district presidents, one of those presidents must be the NY Fed President Throughout the 1990s, the implementation of NAFTA and green policies