TEST BANK for Economics of Money,
Banking and Financial Markets, 11th
Edition by Frederic Mishkin
COMPLETE CHAPTERS 1-25| A+ GUARANTEED
PASS| EXAM QUESTIONS AND ANSWERS
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, Chapter 1: Why Study Money, Banking, and Financial Markets?
1.1 Why Study Financial Markets?
1) Financial markets promote economic efficiency by
A) channeling funds from investors to savers.
B) creating inflation.
C) channeling funds from savers to investors.
D) reducing investment.
Correct Answer> C
Question Status: Revised
2) Financial markets promote greater economic efficiency by channeling funds from to
A) investors; savers
B) borrowers; savers
C) savers; borrowers
D) savers; lenders
Correct Answer> C
Question Status: New
3) Well-functioning financial markets promote
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Correct Answer> D
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Question Status: Revised
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,4) 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.
Correct Answer> D
Question Status: Previous Edition
5) 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
Correct Answer> C
Question Status: New
6) Poorly performing financial markets can be the cause of
A) wealth.
B) poverty.
C) financial stability.
D) financial expansion.
Correct Answer> B
Question Status: Revised
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, 7) 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.
Correct Answer> C
Question Status: Revised
8) 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.
Correct Answer> C
Question Status: Previous Edition
9) Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury
bills fluctuate and are on average.
A) more; lower
B) less; lower
C) more; higher
D) less; higher
Correct Answer> A
Question Status: Previous Edition
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Banking and Financial Markets, 11th
Edition by Frederic Mishkin
COMPLETE CHAPTERS 1-25| A+ GUARANTEED
PASS| EXAM QUESTIONS AND ANSWERS
Ar
ch
Do
1
c
, Chapter 1: Why Study Money, Banking, and Financial Markets?
1.1 Why Study Financial Markets?
1) Financial markets promote economic efficiency by
A) channeling funds from investors to savers.
B) creating inflation.
C) channeling funds from savers to investors.
D) reducing investment.
Correct Answer> C
Question Status: Revised
2) Financial markets promote greater economic efficiency by channeling funds from to
A) investors; savers
B) borrowers; savers
C) savers; borrowers
D) savers; lenders
Correct Answer> C
Question Status: New
3) Well-functioning financial markets promote
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Correct Answer> D
Ar
Question Status: Revised
ch
Do
2
c
,4) 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.
Correct Answer> D
Question Status: Previous Edition
5) 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
Correct Answer> C
Question Status: New
6) Poorly performing financial markets can be the cause of
A) wealth.
B) poverty.
C) financial stability.
D) financial expansion.
Correct Answer> B
Question Status: Revised
Ar
ch
Do
3
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, 7) 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.
Correct Answer> C
Question Status: Revised
8) 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.
Correct Answer> C
Question Status: Previous Edition
9) Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury
bills fluctuate and are on average.
A) more; lower
B) less; lower
C) more; higher
D) less; higher
Correct Answer> A
Question Status: Previous Edition
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