Chapter 1 ss
Why Study Money, Banking, and Financial Markets?
ss ss ss ss ss ss
1.1 Why Study Financial Markets?
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1) Financial markets promote economic efficiency by
ss ss ss ss ss
A) channeling funds from investors to savers. ss ss ss ss ss
B) creating inflation. ss
C) channeling funds from savers to investors. ss ss ss ss ss
D) reducing investment. ss
Answer: s s C
Ques Status: Revised
ss ss
2) Financial markets promote greater economic efficiency by channeling funds from
ss ss ss ss ss ss ss ss ss ss ss to
.
A) investors; savers ss
B) borrowers; savers ss
C) savers; borrowers ss
D) savers; lenders ss
Answer: s s C
Ques Status: New
ss ss
3) Well-functioning financial markets promote s s s s s s
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Answer: s s D
Ques Status: Revised
ss ss
4) Markets in which funds are transferred from those who have excess funds available to
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those who have a shortage of available funds are called
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, A) commodity markets. ss
B) fund-available markets. ss
C) derivative exchange markets.
ss ss
D) financial markets.
ss
Answer: s s D
Ques Status: Previous Edition
ss ss ss
,
, 2 Mishkin · Economics of Money, Banking, and Financial Markets, Alternate
ss ss ss ss ss ss ss ss ss
Edition
5) markets transfer funds from people who have an excess of available funds to
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ss people who have a shortage.
ss ss ss ss
A) Commodity
B) Fund-available
C) Financial
D) Derivative exchange ss
Answer: s s C
Ques Status: New
ss ss
6) Poorly performing financial markets can be the cause of
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A) wealth.
B) poverty.
C) financial stability. ss
D) financial expansion. ss
Answer: s s B
Ques Status: Revised
ss ss
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.
ss ss ss ss ss ss
D) the markets where all borrowers get their funds.
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Answer: s s C
Ques Status: Revised
ss ss
8) The price paid for the rental of borrowed funds (usually expressed as a percentage of
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the rental of $100 per year) is commonly referred to as the
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A) inflation rate. ss
B) exchange rate. ss
C) interest rate. ss
D) aggregate price level. ss ss
Answer: s s C
Ques Status: Previous Edition
ss ss ss
Why Study Money, Banking, and Financial Markets?
ss ss ss ss ss ss
1.1 Why Study Financial Markets?
ss ss ss
1) Financial markets promote economic efficiency by
ss ss ss ss ss
A) channeling funds from investors to savers. ss ss ss ss ss
B) creating inflation. ss
C) channeling funds from savers to investors. ss ss ss ss ss
D) reducing investment. ss
Answer: s s C
Ques Status: Revised
ss ss
2) Financial markets promote greater economic efficiency by channeling funds from
ss ss ss ss ss ss ss ss ss ss ss to
.
A) investors; savers ss
B) borrowers; savers ss
C) savers; borrowers ss
D) savers; lenders ss
Answer: s s C
Ques Status: New
ss ss
3) Well-functioning financial markets promote s s s s s s
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Answer: s s D
Ques Status: Revised
ss ss
4) Markets in which funds are transferred from those who have excess funds available to
ss ss ss ss ss ss ss ss ss ss ss ss ss
those who have a shortage of available funds are called
ss ss ss ss ss ss ss ss ss ss
, A) commodity markets. ss
B) fund-available markets. ss
C) derivative exchange markets.
ss ss
D) financial markets.
ss
Answer: s s D
Ques Status: Previous Edition
ss ss ss
,
, 2 Mishkin · Economics of Money, Banking, and Financial Markets, Alternate
ss ss ss ss ss ss ss ss ss
Edition
5) markets transfer funds from people who have an excess of available funds to
ss ss ss ss ss ss ss ss ss ss ss ss ss
ss people who have a shortage.
ss ss ss ss
A) Commodity
B) Fund-available
C) Financial
D) Derivative exchange ss
Answer: s s C
Ques Status: New
ss ss
6) Poorly performing financial markets can be the cause of
ss ss ss ss ss ss ss ss
A) wealth.
B) poverty.
C) financial stability. ss
D) financial expansion. ss
Answer: s s B
Ques Status: Revised
ss ss
7) The bond markets are important because they are
ss ss ss ss ss ss ss
A) easily the most widely followed financial markets in the United States.
ss ss ss ss ss ss ss ss ss ss
B) the markets where foreign exchange rates are determined.
ss ss ss ss ss ss ss
C) the markets where interest rates are determined.
ss ss ss ss ss ss
D) the markets where all borrowers get their funds.
ss ss ss ss ss ss ss
Answer: s s C
Ques Status: Revised
ss ss
8) The price paid for the rental of borrowed funds (usually expressed as a percentage of
ss ss ss ss ss ss ss ss ss ss ss ss ss ss
the rental of $100 per year) is commonly referred to as the
ss ss ss ss ss ss ss ss ss ss ss ss
A) inflation rate. ss
B) exchange rate. ss
C) interest rate. ss
D) aggregate price level. ss ss
Answer: s s C
Ques Status: Previous Edition
ss ss ss
