The Economics of Money, Banking, and Financial Markets 13th Edition Test Bank by Frederic Mishkin | All Chapters | Verified MCQs with Answers | A+ Exam Prep

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Test Bank
Economics of Money, Banking and
Financial Markets, 13th Edition
by Frederic Mishkin
Complete Chapters| A+ Graded Quiz
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, Franklyn A Plus Pass


Chapter 1

Why Study Money, Banking, and Financial Markets?
1.1Why 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

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
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Answer: C
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Question Status: New
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3) Well-functioning financial markets promote
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A) inflation.
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B) deflation.
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C) unemployment.

D) growth.
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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.

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

Answer: C

Question Status: New
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6) Poorly performing financial markets can be the cause of
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A) wealth.
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B) poverty.
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C) financial stability.
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D) financial expansion.
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Answer: B

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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.

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.

Answer: C

Question Status: Previous Edition
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9) Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury
bills fluctuate and are on average.
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A) more; lower
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B) less; lower
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C) more; higher
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D) less; higher
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Answer: A

Question Status: Previous Edition
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