Textbook Questions and answers- 650 pages (ECS3701-Monetary Economics)

Chapter 1
Why Study Money, Banking, and Financial Markets?


1.1 Why Study Financial Markets?

1) 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.

Answer: C
Ques Status: Revised


2) Financial markets promote greater economic efficiency by channeling funds from ________ to
________.
A) investors; savers
B) borrowers; savers
C) savers; borrowers
D) savers; lenders

Answer: C
Ques Status: New


3) Well-functioning financial markets promote
A) inflation.
B) deflation.
C) unemployment.
D) growth.

Answer: D
Ques Status: Revised


4) Markets in which funds are transferred from those who have excess funds available to those
who have a shortage of available funds are called
A) commodity markets.
B) fund-available markets.
C) derivative exchange markets.
D) financial markets.

Answer: D
Ques Status: Previous Edition