Economics of Money, Banking, and Financial
Markets, 8th Edition Chapter 1-26 Questions
and Answers|Brand New!!!
_____________________________________________________________________________________
Financial innovation can lead to ________ and ________.
A) higher interest rates; higher inflation
B) higher profits; financial disasters
C) lower interest rates; lower inflation
D) phishing; financial gain
B
A financial crisis is ________.
A) typically followed by an economic boom
B) not possible in the modern financial environment
C) a feature of developing economies only
D) a major disruption in the financial markets
D
Money is defined as ________.
A) bills of exchange
B) the unrecognized liability of governments
C) anything that is generally accepted in payment for goods and services or in the repayment of debt
D) a repository of spending power
C
Countries that experience very high rates of inflation may also have ________.
A) rapidly growing money supplies
B) falling money supplies
C) balanced budgets
D) constant money supplies
A
The management of money and interest rates is called ________ policy and is conducted by a nation's
________ bank.
A) fiscal; superior
B) debt; superior
C) monetary; central
D) fiscal; central
, C
Everything else constant, a stronger Canadian dollar will mean that ________.
A) French cheese becomes more expensive
B) Japanese cars become more expensive
C) vacationing in England becomes less expensive
D) vacationing in England becomes more expensive
C
Everything else held constant, a weaker Canadian dollar will likely hurt ________.
A) automobile manufacturers in Ontario that use domestically produced inputs
B) textile exporters in Quebec
C) furniture importers in British Columbia
D) wheat farmers in Saskatchewan that sell domestically
C
Which of the following can be described as direct finance?
A) You borrow $2500 from a friend.
B) You buy shares in a mutual fund.
C) You buy shares of common stock in the secondary market.
D) You take out a mortgage from your local bank.
A
You can borrow $5000 to finance a new business venture. This new venture will generate annual
earnings of $251. The
maximum interest rate that you would pay on the borrowed funds and still increase your income is
________.
A) 12.5 percent
B) 5 percent
C) 25 percent
D) 10 percent
B
Securities are ________ for the person who buys them, but are ________ for the individual or firm
that issues them.
A) nonnegotiable; negotiable
B) negotiable; nonnegotiable
C) liabilities; assets
D) assets; liabilities
D
When I purchase ________, I own a portion of a firm and have the right to vote on issues important to
the firm and to
elect its directors.
Markets, 8th Edition Chapter 1-26 Questions
and Answers|Brand New!!!
_____________________________________________________________________________________
Financial innovation can lead to ________ and ________.
A) higher interest rates; higher inflation
B) higher profits; financial disasters
C) lower interest rates; lower inflation
D) phishing; financial gain
B
A financial crisis is ________.
A) typically followed by an economic boom
B) not possible in the modern financial environment
C) a feature of developing economies only
D) a major disruption in the financial markets
D
Money is defined as ________.
A) bills of exchange
B) the unrecognized liability of governments
C) anything that is generally accepted in payment for goods and services or in the repayment of debt
D) a repository of spending power
C
Countries that experience very high rates of inflation may also have ________.
A) rapidly growing money supplies
B) falling money supplies
C) balanced budgets
D) constant money supplies
A
The management of money and interest rates is called ________ policy and is conducted by a nation's
________ bank.
A) fiscal; superior
B) debt; superior
C) monetary; central
D) fiscal; central
, C
Everything else constant, a stronger Canadian dollar will mean that ________.
A) French cheese becomes more expensive
B) Japanese cars become more expensive
C) vacationing in England becomes less expensive
D) vacationing in England becomes more expensive
C
Everything else held constant, a weaker Canadian dollar will likely hurt ________.
A) automobile manufacturers in Ontario that use domestically produced inputs
B) textile exporters in Quebec
C) furniture importers in British Columbia
D) wheat farmers in Saskatchewan that sell domestically
C
Which of the following can be described as direct finance?
A) You borrow $2500 from a friend.
B) You buy shares in a mutual fund.
C) You buy shares of common stock in the secondary market.
D) You take out a mortgage from your local bank.
A
You can borrow $5000 to finance a new business venture. This new venture will generate annual
earnings of $251. The
maximum interest rate that you would pay on the borrowed funds and still increase your income is
________.
A) 12.5 percent
B) 5 percent
C) 25 percent
D) 10 percent
B
Securities are ________ for the person who buys them, but are ________ for the individual or firm
that issues them.
A) nonnegotiable; negotiable
B) negotiable; nonnegotiable
C) liabilities; assets
D) assets; liabilities
D
When I purchase ________, I own a portion of a firm and have the right to vote on issues important to
the firm and to
elect its directors.
