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

The Economics of Money, Banking, and Fina
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Collections of Test Banks covered
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chapter 1,2,3,4, and 5.
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To all my colleagues who study this important subject from
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present you a collection of test banks which covers fiv
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Hopefully, will help you as it helped me in my
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With my best wishes,
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Mohamed Bagoul. K

,Chapter 1 K




Why Study Money, Banking, and Financial Markets?
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1.1 Why Study Financial Markets?
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1) FinancialKmarketsKpromoteKeconomicKefficiencyKby
A) channelingKfundsKfromKinvestorsKtoKsavers.
B) creatingKinflation.
C) channelingKfundsKfromKsaversKtoKinvestors.
D) reducingKinvestment.
Answer:KC
QuesKStatus:KPreviousKEdition

2) FinancialKmarketsKpromoteKgreaterKeconomicKefficiencyKbyKchannelingKfundsKfrom to
K .
A) investors;Ksavers
B) borrowers;Ksavers
C) savers;Kborrowers
D) savers;Klenders
Answer:KC
QuesKStatus:KPreviousKEdition

3) Well-functioningKfinancialKmarketsKpromote
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Answer:KD
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4) AKkeyKfactorKinKproducingKhighKeconomicKgrowthKis
A) eliminatingKforeignKtrade.
B) well-functioningKfinancialKmarkets.
C) highKinterestKrates.
D) stockKmarketKvolatility.
Answer:KB
QuesKStatus:KNew

5) MarketsKinKwhichKfundsKareKtransferredKfromKthoseKwhoKhaveKexcessKfundsKavailableKtoKth
oseKwhoKhaveKaKshortageKofKavailableKfundsKareKcalled
A) commodityKmarkets.
B) fund-KavailableKmarkets.
C) derivativeKexchangeKmarkets.
D) financialKmarkets.

,2 MishkinK· TheKEconomicsKofKMoney,KBanking,KandKFinancialKMarkets, 9thKEdition



1) K
marketsKtransferKfundsKfromKpeopleKwhoKhaveKanKexcessKofKavailableKfundsKtoKpeo
pleKwhoKhaveKaKshortage.
A) Commodity
B) Fund-Kavailable
C) Financial
D) DerivativeKexchange
Answer:KC
QuesKStatus:KPreviousKEdition

2) PoorlyKperformingKfinancialKmarketsKcanKbeKtheKcauseKof
A) wealth.
B) poverty.
C) financialKstability.
D) financialKexpansion.
Answer:KB
QuesKStatus:KPreviousKEdition

3) TheKbondKmarketsKareKimportantKbecauseKtheyKare
A) easilyKtheKmostKwidelyKfollowedKfinancialKmarketsKinKtheKUnitedKStates.
B) theKmarketsKwhereKforeignKexchangeKratesKareKdetermined.
C) theKmarketsKwhereKinterestKratesKareKdetermined.
D) theKmarketsKwhereKallKborrowersKgetKtheirKfunds.
Answer:KC
QuesKStatus:KPreviousKEdition

4) TheKpriceKpaidKforKtheKrentalKofKborrowedKfundsK(usuallyKexpressedKasKaKpercentageKofKtheKre
ntalKofK$100KperKyear)KisKcommonlyKreferredKtoKasKthe
A) inflationKrate.
B) exchangeKrate.
C) interestKrate.
D) aggregateKpriceKlevel.
Answer:KC
QuesKStatus:KPreviousKEdition

5) ComparedKtoKinterestKratesKonKlong-termKU.S.KgovernmentKbonds,KinterestKratesKonKthreeK-
monthKTreasuryKbillsKfluctuate andKare onKaverage.
A) more;Klower
B) less;Klower
C) more;Khigher
D) less;Khigher
Answer:KA
QuesKStatus:KPreviousKEdition

, ChapterK1K WhyKStudyKMoney,KBanking,KandKFinancial



6) TheKinterestKrateKonKBaaK(mediumKquality)KcorporateKbondsKis
,KonKaverage,KthanKothe
rKinterestKrates,KandKtheKspreadKbetweenKitKandKotherKratesKbecame inKtheK1970s.
A) lower;Ksmaller
B) lower;Klarger
C) higher;Ksmaller
D) higher;Klarger
Answer:KD
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7) EverythingKelseKheldKconstant,KaKdeclineKinKinterestKratesKwillKcauseKspendingKonKhousingKto
A) fall.
B) remainKunchanged.
C) eitherKrise,Kfall,KorKremainKtheKsame.
D) rise.
Answer:KD
QuesKStatus:KPreviousKEdition

8) HighKinterestKratesKmight
purchasingKaKhouseKorKcarKbutKatKtheKsameKtimeKhighKinterestKratesKmigh
t saving.
A) discourage;Kencourage
B) discourage;Kdiscourage
C) encourage;Kencourage
D) encourage;Kdiscourage
Answer:KA
QuesKStatus:KNew

9) AnKincreaseKinKinterestKratesKmight
savingKbecauseKmoreKcanKbeKearnedKinKintere
stKincome.
A) encourage
B) discourage
C) disallow
D) invalidate
Answer:KA
QuesKStatus:KPreviousKEdition

10) EverythingKelseKheldKconstant,KanKincreaseKinKinterestKratesKonKstudentKloans
A) increasesKtheKcostKofKaKcollegeKeducation.
B) reducesKtheKcostKofKaKcollegeKeducation.
C) hasKnoKeffectKonKeducationalKcosts.
D) increasesKcostsKforKstudentsKwithKnoKloans.
Answer:KA
QuesKStatus:KPreviousKEdition