Test Bank for Economics of Money Banking and Financial Markets 12th Edition by Mishkin

concerns include whether companies are doing enough to ensure fairness and equal treatment for all employe
especially in light of issues such as racial discrimination, gender inequality, and disability rights. Legally, the
numerous frameworks and protections in place, such as anti-discrimination laws, but the challenge remains en
that these legal provisions are enforced and that businesses go beyond mere compliance to foster inclusive an
work environments.#### 3.3 **Data Privacy and Security**As businesses increasingly collect vast amounts o
personal data, ethical and legal concerns about data privacy and security have become more prominent. Comp
face the ethical dilemma of balancing their need for consumer data to improve products and services with the
responsibility to protect sensitive information. Legally, many jurisdictions have established laws that govern d
protection, such as the General Data Protection
Test Bank For
Economics of Money, Banking, and Financial Markets, 12e (Mishkin)


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.
Answer: C
Ques Status: Previous Edition AACSB:
Reflective Thinking

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
Ques Status: Previous Edition AACSB:
Reflective Thinking

3) Well-functioning financial markets promote
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Answer: D
Ques Status: Previous Edition AACSB:
Reflective Thinking

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
Ques Status: Previous Edition AACSB:
Reflective Thinking
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
Ques Status: Previous Edition AACSB:
Application of Knowledge
harassment, and labor rights. Ethical concerns include whether companies are doing enough to ensure fairness a
treatment for all employees, especially in light of issues such as racial discrimination, gender inequality, and di
rights. Legally, there are numerous frameworks and protections in place, such as anti-discrimination laws, but t
challenge remains ensuring that these legal provisions are enforced and that businesses go beyond mere compli
foster inclusive and fair work environments.#### 3.3 **Data Privacy and Security**As businesses increasingly
vast amounts of personal data, ethical and legal concerns about data privacy and security have become more pr
Companies face the ethical dilemma of balancing their need for consumer data to improve products and service
responsibility to protect sensitive information. Legally, many jurisdictions have established laws that govern da
protection, such as the General Data Protection

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
Ques Status: Previous Edition AACSB:
Application of Knowledge

7) Poorly performing financial markets can be the cause of
A) wealth.
B) poverty.
C) financial stability.
D) financial expansion. Answer:
B
Ques Status: Previous Edition AACSB:
Reflective Thinking

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
Ques Status: Previous Edition AACSB:
Reflective Thinking

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
Ques Status: Previous Edition
AACSB: Application of Knowledge
10) 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 Answer:
A
Ques Status: Previous Edition AACSB:
Reflective Thinking
harassment, and labor rights. Ethical concerns include whether companies are doing enough to ensure fairness a
treatment for all employees, especially in light of issues such as racial discrimination, gender inequality, and di
rights. Legally, there are numerous frameworks and protections in place, such as anti-discrimination laws, but t
challenge remains ensuring that these legal provisions are enforced and that businesses go beyond mere compli
foster inclusive and fair work environments.#### 3.3 **Data Privacy and Security**As businesses increasingly
vast amounts of personal data, ethical and legal concerns about data privacy and security have become more pr
Companies face the ethical dilemma of balancing their need for consumer data to improve products and service
responsibility to protect sensitive information. Legally, many jurisdictions have established laws that govern da
protection, such as the General Data Protection

11) The interest rate on Baa corporate bonds is , on average, than interest rates on
Treasuries, and the spread between these rates became in the 1970s.
A) lower; smaller
B) lower; larger
C) higher; smaller
D) higher; larger Answer:
D
Ques Status: Previous Edition AACSB:
Reflective Thinking

12) Everything else held constant, a decline in interest rates will cause spending on housing to
A) fall.
B) remain unchanged.