3
Which one of the following statements about the money supply is
correct?
A The money supply is backed by the government’s ability to control the supply of money and therefore to keep its value
relatively stable
B The money supply is backed by government bonds
C The money supply is backed dollar-for-dollar with gold bullion
D The money supply is backed dollar-for-dollar with gold and silver
5 Wally owns 100 shares of stock in Mammoth Corporation that he purchased for $20 per share Every
year he has received, from company profits, $1 for each share he owns If Wally sells all his shares at a
price of $30 per share, he’ll receive a
A dividend of $10 per share
B total capital gain of $10
C total capital gain of $1,000
D a capital gain of $30 per share
11 If a corporation goes bankrupt,
A neither stockholders nor bondholders receive any money
B bondholders get paid from the sale of company assets before stockholders do
C stockholders must honor the debts to bondholders out of personal assets if necessary
D stockholders get paid from the sale of company assets before bondholders do
16 Which one of the following financial assets is considered to be essentially risk-free?
A Real estate
B Gold
C Short-term US government bonds
D Stock in Fortune 500 companies