Test bank for economics of money banking and financial markets business school edition 5th edition mishkin full chapter

,DOWNLOAD THE Test Bank for Economics of Money Banking and FinancialMarket
x x x x x x x x x x x

s Business School Edition 5th Edition Mishkin
x x x x x x




EconomicsxofxMoney,xBanking,xandxFinancialxMarkets,x5ex(Mishkin)x
Chapterx2x AnxOverviewxofxthexFinancialxSystem

2.1 FunctionxofxFinancialxMarkets

1) Everyxfinancialxmarketxhasxthexfollowingxcharacteristic.
A) Itxdeterminesxthexlevelxofxinterestxrates.
B) Itxallowsxcommonxstockxtoxbextraded.
C) Itxallowsxloansxtoxbexmade.
D) Itxchannelsxfundsxfromxlenders-saversxtoxborrowers-
spenders.xAnswer:x D
QuesxStatus:xPreviousxEditionxAACS
B:x ReflectivexThinking

2) Financialxmarketsxhavexthexbasicxfunctionxof
A) gettingxpeoplexwithxfundsxtoxlendxtogetherxwithxpeoplexwhoxwantxtoxborrowxfunds.
B) assuringxthatxthexswingsxinxthexbusinessxcyclexarexlessxpronounced.
C) assuringxthatxgovernmentsxneedxneverxresortxtoxprintingxmoney.
D) providingxaxrisk-
freexrepositoryxofxspendingxpower.xAnswer:x A
QuesxStatus:xPreviousxEditionxAACS
B:x ReflectivexThinking

3) Financialxmarketsximprovexeconomicxwelfarexbecause
A) theyxchannelxfundsxfromxinvestorsxtoxsavers.
B) theyxallowxconsumersxtoxtimextheirxpurchasexbetter.
C) theyxweedxoutxinefficientxfirms.
D) theyxeliminatexthexneedxforxindirectxfinance.x
Answer:xB
QuesxStatus:xPreviousxEditionxAACS
B:x ReflectivexThinking

4) Well-functioningxfinancialxmarkets
A) causexinflation.
B) eliminatexthexneedxforxindirectxfinance.
C) causexfinancialxcrises.
D) allowxthexeconomyxtoxoperatexmorexefficiently.x
Answer:x D
QuesxStatus:xPreviousxEditionxAACS
B:x ReflectivexThinking




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,DOWNLOAD THE Test Bank for Economics of Money Banking and FinancialMarket
x x x x x x x x x x x

s Business School Edition 5th Edition Mishkin
x x x x x x




5) Axbreakdownxofxfinancialxmarketsxcanxresultxin
A) financialxstability.
B) rapidxeconomicxgrowth.
C) politicalxinstability.
D) stablexprices.
Answer:x C
QuesxStatus:xPreviousxEditionxAACS
B:x ReflectivexThinking

6) Thexprincipalxlender-saversxare
A) governments.
B) businesses.
C) households.
D) foreigners.
Answer:x C
QuesxStatus:xPreviousxEditionxAACS
B:x ApplicationxofxKnowledge

7) Whichxofxthexfollowingxcanxbexdescribedxasxdirectxfinance?
A) Youxtakexoutxaxmortgagexfromxyourxlocalxbank.
B) Youxborrowx$2,500xfromxaxfriend.
C) Youxbuyxsharesxofxcommonxstockxinxthexsecondaryxmarket.
D) Youxbuyxsharesxinxaxmutualxfund.x
Answer:xB
QuesxStatus:xPreviousxEditionx
AACSB:x AnalyticalxThinking

8) Assumexthatxyouxborrowx$2,000xatx10%xannualxinterestxtoxfinancexaxnewxbusinessxproject.xForxt
hisxloanxtoxbexprofitable,xthexminimumxamountxthisxprojectxmustxgeneratexinxannualxearningsxisxA)
x$400.

B)x$201.
C)x$200.
D)x$199.
Answer:x B
QuesxStatus:xPreviousxEditionx
AACSB:x AnalyticalxThinking

9) Youxcanxborrowx$5,000xtoxfinancexaxnewxbusinessxventure.xThisxnewxventurexwillxgeneratexan
nualxearningsxofx$251.xThexmaximumxinterestxratexthatxyouxwouldxpayxonxthexborrowedxfundsxand
xstillxincreasex yourxincomexis

A)x25%.
B)x12.5%.
C)x10%.
D)x5%.
Answer:x D
QuesxStatus:xPreviousxEditionx
AACSB:x AnalyticalxThinking
2
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, DOWNLOAD THE Test Bank for Economics of Money Banking and FinancialMarket
x x x x x x x x x x x

s Business School Edition 5th Edition Mishkin
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10) Whichxofxthexfollowingxcanxbexdescribedxasxinvolvingxdirectxfinance?
A) Axcorporationxissuesxnewxsharesxofxstock.
B) Peoplexbuyxsharesxinxaxmutualxfund.
C) Axpensionxfundxmanagerxbuysxaxshort-termxcorporatexsecurityxinxthexsecondaryxmarket.
D) Anxinsurancexcompanyxbuysxsharesxofxcommonxstockxinxthexover-the-
counterxmarkets.xAnswer:x A
QuesxStatus:xPreviousxEditionx
AACSB:x AnalyticalxThinking

11) Whichxofxthexfollowingxcanxbexdescribedxasxinvolvingxdirectxfinance?
A) Axcorporationxtakesxoutxloansxfromxaxbank.
B) Peoplexbuyxsharesxinxaxmutualxfund.
C) Axcorporationxbuysxaxshort-termxcorporatexsecurityxinxaxsecondaryxmarket.
D) Peoplexbuyxsharesxofxcommonxstockxinxthexprimaryxmarkets.x
Answer:x D
QuesxStatus:xPreviousxEditionx
AACSB:x AnalyticalxThinking

12) Whichxofxthexfollowingxcanxbexdescribedxasxinvolvingxindirectxfinance?
A) Youxmakexaxloanxtoxyourxneighbor.
B) Axcorporationxbuysxaxsharexofxcommonxstockxissuedxbyxanotherxcorporationxinxthexprimaryx
market.
C) YouxbuyxaxU.S.xTreasuryxbillxfromxthexU.S.xTreasuryxatxTreasuryDirect.gov.
D) Youxmakexaxdepositxatxaxbank.x
Answer:x D
QuesxStatus:xPreviousxEditionx
AACSB:x AnalyticalxThinking

13) Whichxofxthexfollowingxcanxbexdescribedxasxinvolvingxindirectxfinance?
A) Youxmakexaxloanxtoxyourxneighbor.
B) Youxbuyxsharesxinxaxmutualxfund.
C) YouxbuyxaxU.S.xTreasuryxbillxfromxthexU.S.xTreasuryxatxTreasuryxDirect.gov.
D) Youxpurchasexsharesxinxanxinitialxpublicxofferingxbyxaxcorporationxinxthexprimaryxmarket.x
Answer:xB
QuesxStatus:xPreviousxEditionx
AACSB:x AnalyticalxThinking

14) Securitiesxare forxthexpersonxwhoxbuysxthem,xbutxare
forxthexindividualxorxfirmxthatxissuesxthem.
A) assets;xliabilities
B) liabilities;xassets
C) negotiable;xnonnegotiable
D) nonnegotiable;xnegotiablex
Answer:x A
QuesxStatus:xPreviousxEditionxAACS
B:x ReflectivexThinking


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