Summary of Chapter 3What is Money
Money vs. Currency video
~Broadly defined: Money (or the money supply): anything that is generally
accepted as payment for goods or services or in the repaym
Summary of Chapter 4Understanding Interest Rates
Interest Rate vs.
4 Types of
~a dollar paid to you one year from
now is less valuable than a do
Summary of Chapter 1Why Study Money, Banking and
The price of shares affects
the amount of funds that
can be raised by selling
newly issued stock to
1) A breakdown of financial markets can result in
A) financial stability.
B) rapid economic growth.
C) political instability.
D) stable prices.
2) Which of the following can be described as involving direct finance?
A) A c
Part A: MCQs
As in the Quiz 1
Part B: Short essay
Based on our class discussion and the Mike Maloneys video of currency vs. Money, answer in
details the following:
What is the main difference between currency and money? Why so?
Why the gold and s
Summary of Chapter 2An Overview of Financial System
~ To increase the information available to investors:
Reduce adverse selection and moral hazard problems
Reduce insider trading (SEC)
~To ensure the soundness of financial interm
Summary of Chapter 5The Behavior of Interest Rates
Behavior of Interest
Money and Interest
Continue on the next page
The Determinants of
Theory of Portfo
1) Yes, because the absence of financial markets means that funds cannot be channeled to
people who have the most productive use for them. Entrepreneurs then cannot acquire
funds to set up businesses that would help the economy grow.
2) You would rather h
Chapter 1 Why Study Money, Banking, and Financial Markets?
Dear students, these exercises are only to be used by students ECON207 section 580. The
questions are for your revision purpose. Please respect the copyright of the publisher.
REMEMBER, the copyri