Test Bank for Economics of Money, Banking, and Financial Markets, 13th Edition by Frederic S Mishkin

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l73Markets7313th73Edition73Mishkin


The73Economics73of73Money,73Banking73and73Financial73Markets,7313e73(
Mishkin)73Chapter731
Why73Study73Money,73Banking,73and73Financial73Markets
?

1.1 Why73Study73Financial73Markets?

1) Financial73markets73promote73economic73efficiency73by
A) channeling73funds73from73investors73to73savers.
B) creating73inflation.
C) channeling73funds73from73savers73to73investors.
D) reducing73investmen
t.73Answer:7 3 C
Question73Status:7 3 Previous73Edition73A
ACSB:7 3 Reflective73Thinking

2) Financial73markets73promote73greater73economic73efficiency73by73channeling73funds73from73
73to73
.
A) investors;73savers
B) borrowers;73savers
C) savers;73borrowers
D) savers;73lender
s73Answer:7 3 C
Question73Status:7 3 Previous73Edition73A
ACSB:7 3 Reflective73Thinking

3) Well-functioning73financial73markets73promote
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Answer:7 3 7
3D
Question73Status:7 3 Previous73Edition73A
ACSB:7 3 Reflective73Thinking

4) A73key73factor73in73producing73high73economic73growth73is
A) eliminating73foreign73trade.
B) well-functioning73financial73markets.
C) high73interest73rates.
D) stock73market73volatilit
y.
Answer:7 3 7 3 B
Question73Status:7 3 Previous73Edition73A
ACSB:7 3 Reflective73Thinking


1
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l73Markets7313th73Edition73Mishkin


5) Markets73in73which73funds73are73transferred73from73those73who73have73excess73funds73avail
able73to73those73who73have73a73shortage73of73available73funds73are73called
A) commodity73markets.
B) fund-available73markets.
C) derivative73exchange73markets.
D) financial73market
s.
Answer:7 3 7 3 D
Question73Status:7 3 Previous73Edition73A
ACSB:7 3 Application73of73Knowledge

6) markets73transfer73funds73from73people73who73have73an73excess73of73available73fund
s73to73people73who73have73a73shortage.
A) Commodity
B) Fund-available
C) Financial
D) Derivative73exchang
e73Answer:7 3 C
Question73Status:7 3 Previous73Edition73A
ACSB:7 3 Application73of73Knowledge

7) Poorly73performing73financial73markets73can73be73the73cause73of
A) wealth.
B) poverty.
C) financial73stability.
D) financial73expansio
n.
Answer:7 3 7 3 B
Question73Status:7 3 Previous73Edition73A
ACSB:7 3 Reflective73Thinking

8) The73bond73markets73are73important73because73they73are
A) easily73the73most73widely73followed73financial73markets73in73the73United73States.
B) the73markets73where73foreign73exchange73rates73are73determined.
C) the73markets73where73interest73rates73are73determined.
D) the73markets73where73all73borrowers73get73their7
3funds.73Answer:7 3 C
Question73Status:7 3 Previous73Edition73A
ACSB:7 3 Reflective73Thinking

9) The73price73paid73for73the73rental73of73borrowed73funds73(usually73expressed73as73a73perc
entage73of73the73rental73of73$10073per73year)73is73commonly73referred73to73as73the
A) inflation73rate.
B) exchange73rate.
C) interest73rate.
D) aggregate73price73lev
el.73Answer:7 3 C
2
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, Question73Status:7 3 Previous73Edition73A
ACSB:7 3 Application73of73Knowledge




3
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