Test Bank for The Economics Of Money Banking And Financial Markets 13th Global Edition Frederic Mishkin

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,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

, 2!!!!!!!Mishkin!·!Economics!of!Money,!Banking,!and!Financial!Markets,!Alternate!Edition



5) ________!markets!transfer!funds!from!people!who!have!an!excess!of!available!funds!to!people
who!have!a!shortage.
A) Commodity
B) Fund-available
C) Financial
D) Derivative!exchange

Answer: C
Ques!Status:!New


6) Poorly!performing!financial!markets!can!be!the!cause!of
A) wealth.
B) poverty.
C) financial!stability.
D) financial!expansion.

Answer: B
Ques!Status:!Revised


7) The!bond!markets!are!important!because!they!are
A) easily!the!most!widely!followed!financial!markets!in!the!United!States.
B) the!markets!where!foreign!exchange!rates!are!determined.
C) the!markets!where!interest!rates!are!determined.
D) the!markets!where!all!borrowers!get!their!funds.

Answer: C
Ques!Status:!Revised


8) The!price!paid!for!the!rental!of!borrowed!funds!(usually!expressed!as!a!percentage!of!the
rental!of!$100!per!year)!is!commonly!referred!to!as!the
A) inflation!rate.
B) exchange!rate.
C) interest!rate.
D) aggregate!price!level.

Answer: C
Ques!Status:!Previous!Edition