You Have Been Given an Overview of Stocks, Bonds, and Mutual

question 14

Essay

You have been given an overview of stocks, bonds, and mutual funds. Give one advantage and one disadvantage of investing in each of these.

Understand the concept and purpose of foreign exchange reserves in the context of fixed exchange rate policies.

Distinguish between fixed (or pegged) and flexible exchange rate policies.

Comprehend the economic implications of persistent U.S. trade deficits.

Identify the major components of the current and capital and financial accounts in the balance of payments, and how these balances are determined.

---

Definitions:

Appendicular

Relating to limbs and their attachments to the axial skeleton.

Sphenoid Bone

A butterfly-shaped bone that forms part of the skull base, contributing to the orbits, nasal cavity, and housing the pituitary gland.

Parietal Bone

One of the two bones forming the sides and roof of the cranium.

Vertebral Column

The flexible and strong sequence of bones extending from the skull to the small of the back, protecting the spinal cord and enabling upright posture.