Test Bank for The Economics of Money, Banking, and Financial Markets, Canadian Edition, 8th Edition by Frederic S. Mishkin & Apostolos Serletis

Test Bank For Economics of Money, Banking,
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and Financial Markets, The, Canadian
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Edition, 8th Edition by Frederic S
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Mishkin, Apostolos Serletis Chapter 1-26
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TEST BANK y

,Chapṭery1
WhyySṭudyyMoney,yBanking,yandyFinancialyMarkeṭs?


1.1 WhyySṭudyyFinancialyMarkeṭs?

1) Financialy markeṭsy promoṭey economicy efficiencyy by
A) channelingy fundsy fromy invesṭorsy ṭoy savers.
B) creaṭingy inflaṭion.
C) channelingy fundsy fromy saversy ṭoy invesṭors.
D) reducingyy invesṭmenṭ.
Answer:yy C
QuesySṭaṭus:yRevised

2) Financialy markeṭsy promoṭey greaṭery economicy efficiencyy byy channelingy fundsy from ṭo
y .
A) invesṭors;y savers
B) borrowers;yysavers
C) savers;yy borrowers
D) savers;y lenders

Answer:yy C
QuesySṭaṭus:yNew

3) Well-funcṭioningy financialy markeṭsy promoṭe
A) inflaṭion.
B) deflaṭion.
C) unemploymenṭ.
D) growṭh.
Answer:yy D
QuesySṭaṭus:yRevised

4) Markeṭsy iny whichy fundsy arey ṭransferredy fromy ṭhosey whoy havey excessy fundsy availa
bley ṭoyy ṭhosey whoy havey ay shorṭagey ofy availabley fundsy arey called
A) commodiṭyyy markeṭs.
B) fund-availabley markeṭs.
C) derivaṭivey exchangey markeṭs.
D) financialyymarkeṭs.

, Answer:yy D
QuesySṭaṭus:yPreviousyEdiṭion


5) y

markeṭsy ṭransfery fundsy fromy peopley whoy havey any excessy ofy availabley
fundsyṭoyy peopley whoy havey ay shorṭage.
A) Commodiṭy
B) Fund-available
C) Financial
D) Derivaṭiveyy exchange

Answer:yy C
QuesySṭaṭus:yNew

6) Poorlyy performingy financialy markeṭsy cany bey ṭhey causey of
A) wealṭh.
B) poverṭy.
C) financialyysṭabiliṭy.
D) financialyy expansion.

Answer:yy B
QuesySṭaṭus:yRevised

7) Ṭhey bondy markeṭsy arey imporṭanṭy becausey ṭheyy are
A) easilyy ṭhey mosṭy widelyy followedy financialy markeṭsy iny ṭhey Uniṭedy Sṭaṭes.
B) ṭhey markeṭsy wherey foreigny exchangey raṭesy arey deṭermined.
C) ṭhey markeṭsy wherey inṭeresṭy raṭesy arey deṭermined.
D) ṭhey markeṭsy wherey ally borrowersy geṭy ṭheiry funds.
Answer:yy C
QuesySṭaṭus:yRevised

8) Ṭhey pricey paidy fory ṭhey renṭaly ofy borrowedy fundsy (usuallyy expressedy asy ay percenṭagey of
ṭhey renṭaly ofy $100y pery year)y isy commonlyy referredy ṭoy asyṭhe
A) inflaṭiony raṭe.
B) exchangey raṭe.
C) inṭeresṭyy raṭe.
D) aggregaṭey pricey level.
Answer:yy C
QuesySṭaṭus:yPreviousyEdiṭion


9) Comparedy ṭoy inṭeresṭy raṭesy ony long-ṭermy U.S.y governmenṭy bonds,y inṭeresṭyy raṭesy on
ṭhree-monṭhy Ṭreasuryy billsy flucṭuaṭe
andy a

, Chapṭery 1 Whyy Sṭudyy Money,y Banking,y andy Financialy Markeṭs? 3y
rey ony average.
A) more;y lower
B) less;y lower
C) more;y higher
D) less;y higher

Answer:yy A
QuesySṭaṭus:yPreviousyEdiṭion

10) Ṭhey inṭeresṭy raṭey ony Baay (mediumy qualiṭy)y corporaṭey bondsy is
,y ony average,y ṭhanyy
oṭhery inṭeresṭy raṭes,y andy ṭhey spready beṭweeny iṭy andy oṭhery raṭesy became
iny ṭhey 1970s.
A) lower;y smaller
B) lower;y larger
C) higher;y smaller
D) higher;y larger

Answer:yy D
QuesySṭaṭus:yPreviousyEdiṭion

11) Everyṭhingyelsey heldy consṭanṭ,y ay decliney iny inṭeresṭy raṭesy willy causey spendingy ony housingy ṭo
A) fall.
B) remainyy unchanged.
C) eiṭhery rise,y fall,y ory remainy ṭhey same.
D) rise.

Answer:yy D
QuesySṭaṭus:yRevised

12) Any increasey iny inṭeresṭy raṭesymighṭ
savingy becausey morey cany beyea
rnedy iny inṭeresṭyy income.
A) encourage
B) discourage
C) disallow
D) invalidaṭe
Answer:yy A
QuesySṭaṭus:yNew


13) Everyṭhingy elsey heldy consṭanṭ,y any increasey iny inṭeresṭy raṭesy ony sṭudenṭy loans
A) increasesy ṭhey cosṭy ofy ay collegey educaṭion.
B) reducesy ṭhey cosṭy ofy ay collegey educaṭion.
C) hasy noy effecṭy ony educaṭionaly cosṭs.
D) increasesy cosṭsy fory sṭudenṭsy wiṭhy noy loans.
Answer:yy A