sheet 2 - Money & Banking Sheet 1 1) The money that a...

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Sheet 1 1) The money that a person borrows from a bank or other financial institutions is called A) loan B) interest C) deposit D) savings 2) The money that a person places in a bank account for the bank to use to invest is called A) loan B) interest C) deposit D) none of the above 3) Financial markets promote economic efficiency by A) channeling funds from investors to savers. B) creating inflation. C) channeling funds from savers to investors. D) reducing investment. 4) Financial markets promote greater economic efficiency by channeling funds from ________ to ________. A) investors; savers B) borrowers; savers C) savers; borrowers D) savers; lenders 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) financial market. C) financial intermediation. D) bond market. 6) The financial intermediaries that the average person interacts with most frequently are ________. A) exchanges B) over-the-counter markets C) finance companies D) banks 1
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7) Well-functioning financial markets A) cause inflation. B) eliminate the need for indirect finance. C) cause financial crises. D) produce an efficient allocation of capital. 8) A business cycle is A) a record of the fluctuations that occur in business profits. B) the duration of a business from its founding date to its dissolution date. C) a record of the fluctuations that occur in time series data for key macro variables such as real GDP. D) the average duration of business product cycles, from introduction to obsolescence. 9) Which of the following can be described as involving direct finance? A) A corporation issues new shares of stock.
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This note was uploaded on 03/19/2012 for the course MRKT 602 602 taught by Professor Mohamed during the Spring '12 term at Manor.

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sheet 2 - Money & Banking Sheet 1 1) The money that a...

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