ECON 343 TEST 3 QUESTIONS WITH
100% VERIFIED ANSWERS
\.Financial intermediariesʹ low transaction costs allow them to provide ________
services that make it easier for customers to conduct transactions.
A) conduction B) equitable C) liquidity D) transcendental - ANSWERS✔-C
\.The analysis of how asymmetric information problems affect economic behavior
is called ________ theory.
A) parallel B) principal C) agency D) uneven - ANSWERS✔-C
\.An example of the ________ problem would be if Brian borrowed money from
Sean in order to purchase a used car and instead took a trip to Atlantic City using
those funds.
A) adverse selection B) moral hazard C) costly state verification D) agency -
ANSWERS✔-B
\.Which of the following is NOT one of the eight basic puzzles about financial
structure?
A) Indirect finance, which involves the activities of financial intermediaries, is
many times more important than direct finance, in which businesses raise funds
directly from lenders in financial markets.
B) Debt contracts are typically extremely complicated legal documents that place
substantial restrictions on the behavior of the borrower.
, C) There is very little regulation of the financial system.
D) Collateral is a prevalent feature of debt contracts for both households and
business. - ANSWERS✔-C
\.The current structure of financial markets can be best understood as the result
of attempts by financial market participants to
A) reduce transaction costs.
B) cartelize the provision of financial services.
C) deal with the great number of small firms in the United States.
D) adapt to continually changing government regulations. - ANSWERS✔-A
\.Commercial and farm mortgages, in which property is pledged as collateral,
account for
A) one-half of borrowing by nonfinancial businesses.
B) two-thirds of borrowing by nonfinancial businesses.
C) one-quarter of borrowing by nonfinancial businesses.
D) one-twentieth of borrowing by nonfinancial businesses. - ANSWERS✔-C
\.Of the sources of external funds for nonfinancial businesses in the United States,
loans from banks and other financial intermediaries account for approximately
________ of the total. A) 6% B) 40% C) 56% D) 60% - ANSWERS✔-C
\.Of the four sources of external funding for nonfinancial businesses, the least
often used in the U.S. is
A) bank loans. B) nonbank loans. C) stock. D) bonds. - ANSWERS✔-C
100% VERIFIED ANSWERS
\.Financial intermediariesʹ low transaction costs allow them to provide ________
services that make it easier for customers to conduct transactions.
A) conduction B) equitable C) liquidity D) transcendental - ANSWERS✔-C
\.The analysis of how asymmetric information problems affect economic behavior
is called ________ theory.
A) parallel B) principal C) agency D) uneven - ANSWERS✔-C
\.An example of the ________ problem would be if Brian borrowed money from
Sean in order to purchase a used car and instead took a trip to Atlantic City using
those funds.
A) adverse selection B) moral hazard C) costly state verification D) agency -
ANSWERS✔-B
\.Which of the following is NOT one of the eight basic puzzles about financial
structure?
A) Indirect finance, which involves the activities of financial intermediaries, is
many times more important than direct finance, in which businesses raise funds
directly from lenders in financial markets.
B) Debt contracts are typically extremely complicated legal documents that place
substantial restrictions on the behavior of the borrower.
, C) There is very little regulation of the financial system.
D) Collateral is a prevalent feature of debt contracts for both households and
business. - ANSWERS✔-C
\.The current structure of financial markets can be best understood as the result
of attempts by financial market participants to
A) reduce transaction costs.
B) cartelize the provision of financial services.
C) deal with the great number of small firms in the United States.
D) adapt to continually changing government regulations. - ANSWERS✔-A
\.Commercial and farm mortgages, in which property is pledged as collateral,
account for
A) one-half of borrowing by nonfinancial businesses.
B) two-thirds of borrowing by nonfinancial businesses.
C) one-quarter of borrowing by nonfinancial businesses.
D) one-twentieth of borrowing by nonfinancial businesses. - ANSWERS✔-C
\.Of the sources of external funds for nonfinancial businesses in the United States,
loans from banks and other financial intermediaries account for approximately
________ of the total. A) 6% B) 40% C) 56% D) 60% - ANSWERS✔-C
\.Of the four sources of external funding for nonfinancial businesses, the least
often used in the U.S. is
A) bank loans. B) nonbank loans. C) stock. D) bonds. - ANSWERS✔-C
