THE ECONOMICS OF MONEY BANKING AND FINANCIAL MARKETS EXAM SCRIPT UPDATED QUESTIONS AND ACCURATE ANSWERS FULL SOLUTION

THE ECONOMICS OF MONEY BANKING
AND FINANCIAL MARKETS EXAM SCRIPT
UPDATED QUESTIONS AND ACCURATE
ANSWERS FULL SOLUTION

●● 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


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


●● 4) A key factor in producing high economic growth is
A) eliminating foreign trade.

,B) well-functioning financial markets.
C) high interest rates.
D) stock market volatility.
Answer: B


●● 5) 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


●● 6) ________ 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


●● 7) Poorly performing financial markets can be the cause of

, A) wealth.
B) poverty.
C) financial stability.
D) financial expansion.
Answer: B


●● 8) 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


●● 9) 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