Test Bank for Economics of Money, Banking, and Financial Markets, 13th Edition by Frederic S. Mishkin (Pearson, 2021) | ISBN: 9781292409566 | All Chapters (1-25)

ECONOMICS OF MONEY, BANKING, AND FINANCIAL MARKETS
Test Bank for Economics of Money, Banking, and Financial Markets,

13th Edition by Frederic S. Mishkin (Pearson, 2021) | ISBN:

9781292409566 | All Chapters (1-25)

Testbankscove

, Chapter 1 q




Why Study Money, Banking, and Financial Markets?
q q q q q q




1.1 Why Study Financial Markets?
q q q




1) Financial markets promote economic efficiency by
q q q q q




A) channeling funds from investors to savers. q q q q q




B) creating inflation. q




C) channeling funds from savers to investors. q q q q q




D) reducing investment. q




Answer: C q




Question Status: Revised q q




2) Financial markets promote greater economic efficiency by channeling funds from
q q q q q q q q q to

A) investors; savers q




B) borrowers; savers q




C) savers; borrowers q




D) savers; lenders q




Answer: C
q q




Question Status: New q q




3) Well-functioning financial markets promote q q q




A) inflation.

B) deflation.

C) unemployment.

D) growth.

Answer: D q




Question Status: Revised q q




1|P a g e
q q q q q

,4) Markets in which funds are transferred from those who have excess funds available to those who have
q q q q q q q q q q q q q q q q


a shortage of available funds are called
q q q q q q q




A) commodity markets. q




B) fund-available markets. q




C) derivative exchange markets. q q




D) financial markets. q




Answer: D q




Question Status: Previous Edition
q q q




5) markets transfer funds from people who have an excess of available funds to people who have a
q q q q q q q q q q q q q q q q


shortage.
q




A) Commodity

B) Fund-available

C) Financial

D) Derivative exchange q




Answer: C
q q




Question Status: New q q




6) Poorly performing financial markets can be the cause of
q q q q q q q q




A) wealth.

B) poverty.

C) financial stability. q




D) financial expansion. q




Answer: B q




Question Status: Revisedq q




2|P a g e
q q q q q

, 7) The bond markets are important because they are
q q q q q q q




A) easily the most widely followed financial markets in the United States.
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B) the markets where foreign exchange rates are determined.
q q q q q q q




C) the markets where interest rates are determined.
q q q q q q




D) the markets where all borrowers get their funds.
q q q q q q q




Answer: C q




Question Status: Revised q q




8) The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100
q q q q q q q q q q q q q q q q q q


per year) is commonly referred to as the
q q q q q q q q




A) inflation rate. q




B) exchange rate. q




C) interest rate. q




D) aggregate price level. q q




Answer: C q




Question Status: Previous Edition q q q




9) Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury
q q q q q q q q q q q q q


bills fluctuate and are
q q on average. q q




A) more; lower q




B) less; lower q




C) more; higher q




D) less; higher q




Answer: A
q q




Question Status: Previous Edition q q q




3|P a g e
q q q q q