9/4/23,n8:23nP Testnbanknfullnbankingn-
M ntestnbanksnfornmacroeconomics
Chaptern 01
Ann Introductionn ton Moneyn andn then Financialn System
Multiple-Choicen Questions
1. Identifyn whichn itemn isn notn onen ofn then sixn partsn ofn then financialn system.n a.
Financialn markets
b.n Centraln banksn c.
Creditn cards
d.nFinancialn institutionsn
Ans:nC
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
Topic:nThenSixnPartsnofnthenFinancialnSystem
2. Identifyn whichn itemn isn notn onen ofn then sixn partsn ofn then financialn system.n a.
Financialn instruments
b.n Centraln banksn c.
Creditn cards
d.nFinancialn institutionsn
Ans:nC
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:nReflectivenThin
kingnBlooms:nRemember
Topic:nThenSixnPartsnofnthenFinancialnSystem
3. Then centraln bankn ofn then Unitedn Statesn is:
a. then Bankn ofnAmerica
b. then Federaln Reserven System
c. then U.S.n Treasury
d. Citibank
nAns:nB
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
Topic:nThenSixnPartsnofnthenFinancialnSystem
1
© n2017 nby nMcGraw-
Hill n Education.n This nis nproprietarynmaterial nsolelynfor nauthorizedninstructor nuse. nNot nauthorizednfor nsale nor ndistributionninn anynmann
er. n This ndocument nmaynnot nbe ncopied,nscanned, nduplicated,nforwarded, ndistributed,nornpostednonnanwebsite,ninnwholenornpart.
about:blank 1/153
,9/4/23,n8:23nP Testnbanknfullnbankingn-
M ntestnbanksnfornmacroeconomics
4. Identifyn whichn ofn then followingn isn notn onen ofn then fiven coren principlesn ofn moneyn andn banking.n a.
Riskn requiresn compensation
b.n Timen hasn value
c.n Informationn isn then basisn forn decisionsn d.nStabil
ityncreatesnrisk
Ans:n D
Difficulty:n 01n Easy
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
5. Investingn inn financialn instrumentsn inn today'sn economy:
a. isn ann activityn practicedn onlyn byn then wealthy.
b. involvesn costlyn transactions.
c. requiresn an relativelyn largen sumn ofn moneyn ton investn (moren thann $100,000).
d. isn maden easiern byn then usen ofn mutualn fun
ds.nAns:nD
Difficulty:n 02n Medium
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
6. Whichn ofn then followingn isn ann examplen ofn an financialn market?
a. An localn coffeehousen wheren peoplen regularlyn buyn andn selln financialn instruments.
b. Anbankn thatn onlyn acceptsn depositsn andn issuesn loans.
c. Ann electronicn networkn usedn forn buyingn andn sellingn textbooks.
d. Ancentraln bankn usedn forn raisingn taxesn andn borrowingn onn behalfn ofn then governm
ent.nAns:nA
Difficulty:n 02n Medium
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenSixnPartsnofnthenFinancialnSystem
7. Then amountn ofn informationn ann individualn wouldn seekn beforen makingn an decision:
a. isn aboutn then samen acrossn alln individuals.
b. variesn directlyn withn then importancen ofn then decision.
c. isn then samen acrossn alln decisionsn butn variesn acrossn individuals.
d. dependsn onn hown muchn timen itn willn taken ton getn then informationn regardlessn ofn then decis
ion.nAns:nB
Difficulty:n 02n Medium
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinking
2
© n2017 nby nMcGraw-
Hill n Education.n This nis nproprietarynmaterial nsolelynfor nauthorizedninstructor nuse. nNot nauthorizednfor nsale nor ndistributionninn anynmann
er. n This ndocument nmaynnot nbe ncopied,nscanned, nduplicated,nforwarded, ndistributed,nornpostednonnanwebsite,ninnwholenornpart.
about:blank 2/153
,9/4/23,n8:23nP Testnbanknfullnbankingn-
M ntestnbanksnfornmacroeconomics
Blooms:n Understand
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
8. Then statementn "riskn requiresn compensation"n impliesn thatn people:
a. don notn taken risk.
b. onlyn acceptn riskn whenn theyn absolutelyn haven to.
c. willn onlyn acceptn riskn whenn theyn aren rewardedn forn doingn so.
d. avoidnrisknatnallncos
t.
Ans:n C
Difficulty:n 01n Easy
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
9. Mutualn fundsn have:
a. beenn createdn forn veryn wealthyn individualsn withn an lotn ofn moneyn ton invest.
b. increasedn then risksn associatedn withn constructingn an portfolio.
c. reducedn then costsn associatedn withn gatheringn informationn onn stocksn andn bonds.
d. increasedn then transactionsn costsn associatedn withn participatingn inn financialn marke
ts.nAns:nC
Difficulty:n 02n Medium
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
10. Centraln banksn cann improven then welfaren ofn an societyn byn doingn alln ofn then followingn except:
a. servingn then interestsn ofn governmentn rathern thann then publicn atn large.
b. helpingn ton promoten economicn growth.
c. focusingn onn keepingn then overalln leveln ofn pricesn stable.
d. helpingn ton reducen then volatilityn ofn businessn cycle
s.nAns:nA
Difficulty:n 02n Medium
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenSixnPartsnofnthenFinancialnSystem
11. Inn then Unitedn States,n controln ofn then quantityn ofn moneyn isn givenn ton the:
a. President.
3
© n2017 nby nMcGraw-
Hill n Education.n This nis nproprietarynmaterial nsolelynfor nauthorizedninstructor nuse. nNot nauthorizednfor nsale nor ndistributionninn anynmann
er. n This ndocument nmaynnot nbe ncopied,nscanned, nduplicated,nforwarded, ndistributed,nornpostednonnanwebsite,ninnwholenornpart.
about:blank 3/153
, 9/4/23,n8:23nP Testnbanknfullnbankingn-
M ntestnbanksnfornmacroeconomics
b. Federaln Reserven System.
c. Bureaun ofn Printingn andn Engraving.
d. DepartmentnofnthenTreasury
.nAns:nB
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
Topic:nThenSixnPartsnofnthenFinancialnSystem
12. Whichn ofn then followingn statementsn bestn describesn financialn instruments?
a. Alln financialn instrumentsn aren an meansn ofn payment.
b. Financialn instrumentsn cann transfern resourcesn betweenn peoplen butn notn risk.
c. Financialn instrumentsn cann transfern resourcesn andn riskn betweenn people.
d. Financialn instrumentsn cann transfern riskn butn notn resourcesn betweenn peop
le.nAns:nC
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenSixnPartsnofnthenFinancialnSystem
13. Whichn ofn then followingn statementsn bestn describesn financialn markets?
a. Financialn marketsn lowern then costn andn increasen then speedn ofn buyingn andn sellingn finan
cialninstruments.
b. Financialn marketsn increasen then speedn ofn buyingn andn selling,n butn theyn alson increasen then
costnsincenpeoplenarenearningn feesnfornthesentransactions.
c. Financialn marketsn aren an goodn examplen ofn unregulatedn markets.
d. Financialn marketsn todayn offern fewern instrumentsn thann theyn didn inn then p
ast.nAns:nA
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenSixnPartsnofnthenFinancialnSystem
14. Then Newn Yorkn Stockn Exchangen isn ann examplen ofn a:
a. financialn instrument.
b. financialn institution.
c. financialn market.
d. bank.
Ans:n C
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
4
© n2017 nby nMcGraw-
Hill n Education.n This nis nproprietarynmaterial nsolelynfor nauthorizedninstructor nuse. nNot nauthorizednfor nsale nor ndistributionninn anynmann
er. n This ndocument nmaynnot nbe ncopied,nscanned, nduplicated,nforwarded, ndistributed,nornpostednonnanwebsite,ninnwholenornpart.
about:blank 4/153
M ntestnbanksnfornmacroeconomics
Chaptern 01
Ann Introductionn ton Moneyn andn then Financialn System
Multiple-Choicen Questions
1. Identifyn whichn itemn isn notn onen ofn then sixn partsn ofn then financialn system.n a.
Financialn markets
b.n Centraln banksn c.
Creditn cards
d.nFinancialn institutionsn
Ans:nC
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
Topic:nThenSixnPartsnofnthenFinancialnSystem
2. Identifyn whichn itemn isn notn onen ofn then sixn partsn ofn then financialn system.n a.
Financialn instruments
b.n Centraln banksn c.
Creditn cards
d.nFinancialn institutionsn
Ans:nC
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:nReflectivenThin
kingnBlooms:nRemember
Topic:nThenSixnPartsnofnthenFinancialnSystem
3. Then centraln bankn ofn then Unitedn Statesn is:
a. then Bankn ofnAmerica
b. then Federaln Reserven System
c. then U.S.n Treasury
d. Citibank
nAns:nB
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
Topic:nThenSixnPartsnofnthenFinancialnSystem
1
© n2017 nby nMcGraw-
Hill n Education.n This nis nproprietarynmaterial nsolelynfor nauthorizedninstructor nuse. nNot nauthorizednfor nsale nor ndistributionninn anynmann
er. n This ndocument nmaynnot nbe ncopied,nscanned, nduplicated,nforwarded, ndistributed,nornpostednonnanwebsite,ninnwholenornpart.
about:blank 1/153
,9/4/23,n8:23nP Testnbanknfullnbankingn-
M ntestnbanksnfornmacroeconomics
4. Identifyn whichn ofn then followingn isn notn onen ofn then fiven coren principlesn ofn moneyn andn banking.n a.
Riskn requiresn compensation
b.n Timen hasn value
c.n Informationn isn then basisn forn decisionsn d.nStabil
ityncreatesnrisk
Ans:n D
Difficulty:n 01n Easy
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
5. Investingn inn financialn instrumentsn inn today'sn economy:
a. isn ann activityn practicedn onlyn byn then wealthy.
b. involvesn costlyn transactions.
c. requiresn an relativelyn largen sumn ofn moneyn ton investn (moren thann $100,000).
d. isn maden easiern byn then usen ofn mutualn fun
ds.nAns:nD
Difficulty:n 02n Medium
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
6. Whichn ofn then followingn isn ann examplen ofn an financialn market?
a. An localn coffeehousen wheren peoplen regularlyn buyn andn selln financialn instruments.
b. Anbankn thatn onlyn acceptsn depositsn andn issuesn loans.
c. Ann electronicn networkn usedn forn buyingn andn sellingn textbooks.
d. Ancentraln bankn usedn forn raisingn taxesn andn borrowingn onn behalfn ofn then governm
ent.nAns:nA
Difficulty:n 02n Medium
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenSixnPartsnofnthenFinancialnSystem
7. Then amountn ofn informationn ann individualn wouldn seekn beforen makingn an decision:
a. isn aboutn then samen acrossn alln individuals.
b. variesn directlyn withn then importancen ofn then decision.
c. isn then samen acrossn alln decisionsn butn variesn acrossn individuals.
d. dependsn onn hown muchn timen itn willn taken ton getn then informationn regardlessn ofn then decis
ion.nAns:nB
Difficulty:n 02n Medium
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinking
2
© n2017 nby nMcGraw-
Hill n Education.n This nis nproprietarynmaterial nsolelynfor nauthorizedninstructor nuse. nNot nauthorizednfor nsale nor ndistributionninn anynmann
er. n This ndocument nmaynnot nbe ncopied,nscanned, nduplicated,nforwarded, ndistributed,nornpostednonnanwebsite,ninnwholenornpart.
about:blank 2/153
,9/4/23,n8:23nP Testnbanknfullnbankingn-
M ntestnbanksnfornmacroeconomics
Blooms:n Understand
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
8. Then statementn "riskn requiresn compensation"n impliesn thatn people:
a. don notn taken risk.
b. onlyn acceptn riskn whenn theyn absolutelyn haven to.
c. willn onlyn acceptn riskn whenn theyn aren rewardedn forn doingn so.
d. avoidnrisknatnallncos
t.
Ans:n C
Difficulty:n 01n Easy
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
9. Mutualn fundsn have:
a. beenn createdn forn veryn wealthyn individualsn withn an lotn ofn moneyn ton invest.
b. increasedn then risksn associatedn withn constructingn an portfolio.
c. reducedn then costsn associatedn withn gatheringn informationn onn stocksn andn bonds.
d. increasedn then transactionsn costsn associatedn withn participatingn inn financialn marke
ts.nAns:nC
Difficulty:n 02n Medium
Learningn Objective:n 01-
02nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenFivenCorenPrinciplesnofnMoneynandnBanking
10. Centraln banksn cann improven then welfaren ofn an societyn byn doingn alln ofn then followingn except:
a. servingn then interestsn ofn governmentn rathern thann then publicn atn large.
b. helpingn ton promoten economicn growth.
c. focusingn onn keepingn then overalln leveln ofn pricesn stable.
d. helpingn ton reducen then volatilityn ofn businessn cycle
s.nAns:nA
Difficulty:n 02n Medium
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenSixnPartsnofnthenFinancialnSystem
11. Inn then Unitedn States,n controln ofn then quantityn ofn moneyn isn givenn ton the:
a. President.
3
© n2017 nby nMcGraw-
Hill n Education.n This nis nproprietarynmaterial nsolelynfor nauthorizedninstructor nuse. nNot nauthorizednfor nsale nor ndistributionninn anynmann
er. n This ndocument nmaynnot nbe ncopied,nscanned, nduplicated,nforwarded, ndistributed,nornpostednonnanwebsite,ninnwholenornpart.
about:blank 3/153
, 9/4/23,n8:23nP Testnbanknfullnbankingn-
M ntestnbanksnfornmacroeconomics
b. Federaln Reserven System.
c. Bureaun ofn Printingn andn Engraving.
d. DepartmentnofnthenTreasury
.nAns:nB
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
Topic:nThenSixnPartsnofnthenFinancialnSystem
12. Whichn ofn then followingn statementsn bestn describesn financialn instruments?
a. Alln financialn instrumentsn aren an meansn ofn payment.
b. Financialn instrumentsn cann transfern resourcesn betweenn peoplen butn notn risk.
c. Financialn instrumentsn cann transfern resourcesn andn riskn betweenn people.
d. Financialn instrumentsn cann transfern riskn butn notn resourcesn betweenn peop
le.nAns:nC
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenSixnPartsnofnthenFinancialnSystem
13. Whichn ofn then followingn statementsn bestn describesn financialn markets?
a. Financialn marketsn lowern then costn andn increasen then speedn ofn buyingn andn sellingn finan
cialninstruments.
b. Financialn marketsn increasen then speedn ofn buyingn andn selling,n butn theyn alson increasen then
costnsincenpeoplenarenearningn feesnfornthesentransactions.
c. Financialn marketsn aren an goodn examplen ofn unregulatedn markets.
d. Financialn marketsn todayn offern fewern instrumentsn thann theyn didn inn then p
ast.nAns:nA
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nUnderstand
Topic:nThenSixnPartsnofnthenFinancialnSystem
14. Then Newn Yorkn Stockn Exchangen isn ann examplen ofn a:
a. financialn instrument.
b. financialn institution.
c. financialn market.
d. bank.
Ans:n C
Difficulty:n 01n Easy
Learningn Objective:n 01-
01nAACSB:n Reflectiven Thinkingn
Blooms:nRemember
4
© n2017 nby nMcGraw-
Hill n Education.n This nis nproprietarynmaterial nsolelynfor nauthorizedninstructor nuse. nNot nauthorizednfor nsale nor ndistributionninn anynmann
er. n This ndocument nmaynnot nbe ncopied,nscanned, nduplicated,nforwarded, ndistributed,nornpostednonnanwebsite,ninnwholenornpart.
about:blank 4/153
