tb01 - Chapter 1 Why Study Money, Banking, and Financial...

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Chapter 1 Why Study Money, Banking, and Financial Markets? T Multiple Choice 1) Financial markets and institutions (a) involve the movement of huge flows of money. (b) affect the profits of businesses. (c) affect the types of goods and services produced in an economy. (d) do each of the above. (e) do only (a) and (b) of the above. Answer: D Question Status: Previous Edition 2) Financial markets and institutions (a) involve the movement of huge flows of money. (b) affect the location of businesses. (c) affect the types of goods and services produced in an economy. (d) do each of the above. (e) do only (a) and (c) of the above. Answer: E Question Status: Previous Edition 3) Money, financial institutions, and financial markets in the United States can have a major impact on (a) economic well being of other countries besides the United States. (b) the kinds of goods and services that are produced. (c) the outcome of political elections. (d) all of the above. (e) only (a) and (b) of the above. Answer: D Question Status: Previous Edition 4) Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called (a) commodity markets. (b) fund-available markets. (c) derivative exchange markets. (d) financial markets. Answer: D Question Status: Previous Edition
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2 Frederic S. Mishkin • Economics of Money, Banking, and Financial Markets, Seventh Edition 5) Channeling funds from individuals with surplus funds to those desiring funds when the saver does not purchase the borrower’s security is known as (a) barter. (b) redistribution. (c) theft. (d) taxation. (e) financial intermediation. Answer: E Question Status: Study Guide 6) Financial markets promote economic efficiency by (a) channeling funds from investors to savers. (b) creating inflation. (c) causing recessions. (d) channeling funds from savers to investors. (e) reducing investment. Answer: D Question Status: New 7) Well-functioning financial markets promote (a) inflation. (b) deflation. (c) unemployment. (d) growth. (e) none of the above. Answer: D Question Status: New 8) Poorly performing financial markets can be the cause of (a) wealth. (b) poverty. (c) financial stability. (d) all of the above. (e) none of the above. Answer: B Question Status: New 9) The bond markets are important because (a) they are easily the most widely followed financial markets in the United States. (b) they are the markets where foreign exchange rates are determined. (c) they are the markets where interest rates are determined. (d) of each of the above. (e) of only (a) and (b) of the above. Answer: C Question Status: Previous Edition
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Chapter 1 Why Study Money, Banking, and Financial Markets? 3 10) The bond markets are important because (a) they are the markets where interest rates are determined. (b) they are the markets where most borrowers get their funds.
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tb01 - Chapter 1 Why Study Money, Banking, and Financial...

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