Test Bank For Economics of Money, Banking,
m m m m m m
and Financial Markets, The, Canadian
m m m m
Edition, 8th Edition by Frederic S
m m m m m
Mishkin, Apostolos Serletis Chapter 1-26
m m m m
TEST BANK m
,Chapṭer 1 m
WhymSṭudymMoney,mBanking,mandmFinancialmMarkeṭs?
1.1 WhymSṭudymFinancialmMarkeṭs?
1) Financialm markeṭsm promoṭem economicm efficiencym by
A) channelingm fundsm fromm invesṭorsm ṭom savers.
B) creaṭingm inflaṭion.
C) channelingm fundsm fromm saversm ṭom invesṭors.
D) reducingmminvesṭmenṭ.
Answer:mm C
QuesmSṭaṭus:mRevised
2) Financialm markeṭsm promoṭem greaṭerm economicm efficiencym bym channelingm fundsm from ṭo
m .
A) invesṭors;m savers
B) borrowers;m savers
C) savers;m borrowers
D) savers;m lenders
Answer:mm C
QuesmSṭaṭus:mNew
3) Well-funcṭioningmfinancialm markeṭsmpromoṭe
A) inflaṭion.
B) deflaṭion.
C) unemploymenṭ.
D) growṭh.
Answer:mm D
QuesmSṭaṭus:mRevised
4) Markeṭsm inm whichm fundsm arem ṭransferredm fromm ṭhosem whom havem excessm fundsm av
ailablem ṭom ṭhosem whom havem am shorṭagem ofm availablem fundsm arem called
A) commodiṭymmmarkeṭs.
B) fund-availablem markeṭs.
C) derivaṭivem exchangem markeṭs.
D) financialm markeṭs.
Answer:mm D
QuesmSṭaṭus:mPreviousmEdiṭion
5) m
markeṭsm ṭransferm fundsm fromm peoplem whom havem anm excessm ofm available
,m
m fundsm ṭom
peoplem whoChapṭer
m havemmam1mmmm
shorṭage.
Whym Sṭudym Money,m Banking,m andm Financialm Markeṭ
s? 3m
A) Commodiṭy
B) Fund-available
C) Financial
D) Derivaṭivemmexchange
Answer:mm C
QuesmSṭaṭus:mNew
6) Poorlym performingm financialm markeṭsm canm bem ṭhem causem of
A) wealṭh.
B) poverṭy.
C) financialm sṭabiliṭy.
D) financialmm expansion.
Answer:mm B
QuesmSṭaṭus:mRevised
7) Ṭhem bondm markeṭsm arem imporṭanṭm becausem ṭheym are
A) easilym ṭhem mosṭm widelym followedm financialm markeṭsm inm ṭhem Uniṭedm Sṭaṭes.
B) ṭhem markeṭsm wherem foreignm exchangem raṭesm arem deṭermined.
C) ṭhem markeṭsm wherem inṭeresṭm raṭesm arem deṭermined.
D) ṭhem markeṭsm wherem allm borrowersm geṭm ṭheirm funds.
Answer:mm C
QuesmSṭaṭus:mRevised
8) Ṭhem pricem paidm form ṭhem renṭalm ofm borrowedm fundsm (usuallym expressedm asm am percenṭage
m of
ṭhem renṭalm ofm $100m perm year)m ism commonlym referredm ṭom asm ṭhe
A) inflaṭionm raṭe.
B) exchangem raṭe.
C) inṭeresṭm raṭe.
D) aggregaṭem pricem level.
Answer:mm C
QuesmSṭaṭus:mPreviousmEdiṭion
9) Comparedm ṭom inṭeresṭm raṭesm onm long-
ṭermm U.S.m governmenṭm bonds,m inṭeresṭm raṭesm onm ṭhree-
monṭhm Ṭreasurym billsm flucṭuaṭe andm are
onm average.
A) more;m lower
B) less;m lower
C) more;m higher
D) less;m higher
Answer:mm A
QuesmSṭaṭus:mPreviousmEdiṭion
10) Ṭhem inṭeresṭm raṭem onm Baam (mediumm qualiṭy)m corporaṭem bondsm is
,m onm average,m ṭhan
, 4 Mishkinm ·m Economicsm ofm Money,m Banking,m andm Financialm Markeṭs,m Alṭernaṭem
m oṭherm inṭeresṭm raṭes,m andm ṭhem spreadm beṭweenm iṭm andm oṭherm raṭesm became
Ediṭion
inm ṭhem 1970s.
A) lower;m smaller
B) lower;m larger
C) higher;m smaller
D) higher;m larger
Answer:mm D
QuesmSṭaṭus:mPreviousmEdiṭion
11) Everyṭhingm elsem heldm consṭanṭ,m am declinem inm inṭeresṭm raṭesm willm causem spendingm onm housi
ngm ṭo
A) fall.
B) remainm unchanged.
C) eiṭherm rise,m fall,m orm remainm ṭhem same.
D) rise.
Answer:mm D
QuesmSṭaṭus:mRevised
12) Anm increasem inm inṭeresṭm raṭesm mighṭ
savingm becausem morem canm bem earne
dm inm inṭeresṭm income.
A) encourage
B) discourage
C) disallow
D) invalidaṭe
Answer:mm A
QuesmSṭaṭus:mNew
13) Everyṭhingm elsem heldm consṭanṭ,m anm increasem inm inṭeresṭm raṭesm onm sṭudenṭm loans
A) increasesm ṭhem cosṭm ofm am collegem educaṭion.
B) reducesm ṭhem cosṭm ofm am collegem educaṭion.
C) hasm nom effecṭm onm educaṭionalm cosṭs.
D) increasesm cosṭsm form sṭudenṭsm wiṭhm nom loans.
Answer:mm A
QuesmSṭaṭus:mRevised
14) Highm inṭeresṭm raṭesm mighṭm causem am corporaṭionm ṭo buildingm am newm planṭm ṭhaṭ
wouldm providem morem jobs.
A) compleṭe
B) consider
C) posṭpone
D) conṭemplaṭe
Answer:mm C
QuesmSṭaṭus:mNew
15) Ṭhem sṭockm markeṭm ism imporṭanṭm becausem iṭm is
A) wherem inṭeresṭm raṭesm arem deṭermined.
m m m m m m
and Financial Markets, The, Canadian
m m m m
Edition, 8th Edition by Frederic S
m m m m m
Mishkin, Apostolos Serletis Chapter 1-26
m m m m
TEST BANK m
,Chapṭer 1 m
WhymSṭudymMoney,mBanking,mandmFinancialmMarkeṭs?
1.1 WhymSṭudymFinancialmMarkeṭs?
1) Financialm markeṭsm promoṭem economicm efficiencym by
A) channelingm fundsm fromm invesṭorsm ṭom savers.
B) creaṭingm inflaṭion.
C) channelingm fundsm fromm saversm ṭom invesṭors.
D) reducingmminvesṭmenṭ.
Answer:mm C
QuesmSṭaṭus:mRevised
2) Financialm markeṭsm promoṭem greaṭerm economicm efficiencym bym channelingm fundsm from ṭo
m .
A) invesṭors;m savers
B) borrowers;m savers
C) savers;m borrowers
D) savers;m lenders
Answer:mm C
QuesmSṭaṭus:mNew
3) Well-funcṭioningmfinancialm markeṭsmpromoṭe
A) inflaṭion.
B) deflaṭion.
C) unemploymenṭ.
D) growṭh.
Answer:mm D
QuesmSṭaṭus:mRevised
4) Markeṭsm inm whichm fundsm arem ṭransferredm fromm ṭhosem whom havem excessm fundsm av
ailablem ṭom ṭhosem whom havem am shorṭagem ofm availablem fundsm arem called
A) commodiṭymmmarkeṭs.
B) fund-availablem markeṭs.
C) derivaṭivem exchangem markeṭs.
D) financialm markeṭs.
Answer:mm D
QuesmSṭaṭus:mPreviousmEdiṭion
5) m
markeṭsm ṭransferm fundsm fromm peoplem whom havem anm excessm ofm available
,m
m fundsm ṭom
peoplem whoChapṭer
m havemmam1mmmm
shorṭage.
Whym Sṭudym Money,m Banking,m andm Financialm Markeṭ
s? 3m
A) Commodiṭy
B) Fund-available
C) Financial
D) Derivaṭivemmexchange
Answer:mm C
QuesmSṭaṭus:mNew
6) Poorlym performingm financialm markeṭsm canm bem ṭhem causem of
A) wealṭh.
B) poverṭy.
C) financialm sṭabiliṭy.
D) financialmm expansion.
Answer:mm B
QuesmSṭaṭus:mRevised
7) Ṭhem bondm markeṭsm arem imporṭanṭm becausem ṭheym are
A) easilym ṭhem mosṭm widelym followedm financialm markeṭsm inm ṭhem Uniṭedm Sṭaṭes.
B) ṭhem markeṭsm wherem foreignm exchangem raṭesm arem deṭermined.
C) ṭhem markeṭsm wherem inṭeresṭm raṭesm arem deṭermined.
D) ṭhem markeṭsm wherem allm borrowersm geṭm ṭheirm funds.
Answer:mm C
QuesmSṭaṭus:mRevised
8) Ṭhem pricem paidm form ṭhem renṭalm ofm borrowedm fundsm (usuallym expressedm asm am percenṭage
m of
ṭhem renṭalm ofm $100m perm year)m ism commonlym referredm ṭom asm ṭhe
A) inflaṭionm raṭe.
B) exchangem raṭe.
C) inṭeresṭm raṭe.
D) aggregaṭem pricem level.
Answer:mm C
QuesmSṭaṭus:mPreviousmEdiṭion
9) Comparedm ṭom inṭeresṭm raṭesm onm long-
ṭermm U.S.m governmenṭm bonds,m inṭeresṭm raṭesm onm ṭhree-
monṭhm Ṭreasurym billsm flucṭuaṭe andm are
onm average.
A) more;m lower
B) less;m lower
C) more;m higher
D) less;m higher
Answer:mm A
QuesmSṭaṭus:mPreviousmEdiṭion
10) Ṭhem inṭeresṭm raṭem onm Baam (mediumm qualiṭy)m corporaṭem bondsm is
,m onm average,m ṭhan
, 4 Mishkinm ·m Economicsm ofm Money,m Banking,m andm Financialm Markeṭs,m Alṭernaṭem
m oṭherm inṭeresṭm raṭes,m andm ṭhem spreadm beṭweenm iṭm andm oṭherm raṭesm became
Ediṭion
inm ṭhem 1970s.
A) lower;m smaller
B) lower;m larger
C) higher;m smaller
D) higher;m larger
Answer:mm D
QuesmSṭaṭus:mPreviousmEdiṭion
11) Everyṭhingm elsem heldm consṭanṭ,m am declinem inm inṭeresṭm raṭesm willm causem spendingm onm housi
ngm ṭo
A) fall.
B) remainm unchanged.
C) eiṭherm rise,m fall,m orm remainm ṭhem same.
D) rise.
Answer:mm D
QuesmSṭaṭus:mRevised
12) Anm increasem inm inṭeresṭm raṭesm mighṭ
savingm becausem morem canm bem earne
dm inm inṭeresṭm income.
A) encourage
B) discourage
C) disallow
D) invalidaṭe
Answer:mm A
QuesmSṭaṭus:mNew
13) Everyṭhingm elsem heldm consṭanṭ,m anm increasem inm inṭeresṭm raṭesm onm sṭudenṭm loans
A) increasesm ṭhem cosṭm ofm am collegem educaṭion.
B) reducesm ṭhem cosṭm ofm am collegem educaṭion.
C) hasm nom effecṭm onm educaṭionalm cosṭs.
D) increasesm cosṭsm form sṭudenṭsm wiṭhm nom loans.
Answer:mm A
QuesmSṭaṭus:mRevised
14) Highm inṭeresṭm raṭesm mighṭm causem am corporaṭionm ṭo buildingm am newm planṭm ṭhaṭ
wouldm providem morem jobs.
A) compleṭe
B) consider
C) posṭpone
D) conṭemplaṭe
Answer:mm C
QuesmSṭaṭus:mNew
15) Ṭhem sṭockm markeṭm ism imporṭanṭm becausem iṭm is
A) wherem inṭeresṭm raṭesm arem deṭermined.
