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

Test Bank b




Economics of Money, Banking and Financial
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Markets, 13th Edition
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by Frederic Mishkin
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Complete Chapters| A+ Graded Quiz
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, Chapter 1 b




Why Study Money, Banking, and Financial Markets?
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1.1 Why Study Financial Markets?
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1) Financial markets promote economic efficiency by
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A) channeling funds from investors to savers. b b b b b




B) creating inflation. b




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




D) reducing investment. b




Answer: C b




Question Status: Revised b b




2) Financial markets promote greater economic efficiency by channeling funds from
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A) investors; savers b




B) borrowers; savers b




C) savers; borrowers b




D) savers; lenders b




Answer: C
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Question Status: New b b




3) Well-functioning financial markets promote b b b




A) inflation.

B) deflation.

C) unemployment.

D) growth.

Answer: D b




Question Status: Revised b b




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,4) Markets in which funds are transferred from those who have excess funds available to those who have
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a shortage of available funds are called
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A) commodity markets. b




B) fund-available markets. b




C) derivative exchange markets. b b




D) financial markets. b




Answer: D b




Question Status: Previous Edition
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5) markets transfer funds from people who have an excess of available funds to people who have a
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shortage.
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A) Commodity

B) Fund-available

C) Financial

D) Derivative exchange b




Answer: C
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Question Status: New b b




6) Poorly performing financial markets can be the cause of
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A) wealth.

B) poverty.

C) financial stability. b




D) financial expansion. b




Answer: B b




Question Status: Revisedb b




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, 7) The bond markets are important because they are
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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.
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C) the markets where interest rates are determined.
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D) the markets where all borrowers get their funds.
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Answer: C b




Question Status: Revised b b




8) The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100
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per year) is commonly referred to as the
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A) inflation rate. b




B) exchange rate. b




C) interest rate. b




D) aggregate price level. b b




Answer: C b




Question Status: Previous Edition b b b




9) Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury
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bills fluctuate and are
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A) more; lower b




B) less; lower b




C) more; higher b




D) less; higher b




Answer: A
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Question Status: Previous Edition b b b




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