9/4/23,z8:23zPM Testzbankzfullzbankingz-ztestzbankszforzmacroeconomics
Chapterz 01
AnzIntroductionz tozMoneyz andz thez Financialz System
Multiple-Choicez Questions
1. Identifyzwhichz itemz isznotzonezofzthezsixzpartszofzthez financialzsystem.za.
Financialz markets
b.zCentralzbankszc.
Creditzcards
d.zFinancialzinstitutions
z Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zRemember
Topic:zThezSixzPartszofzthezFinancialzSystem
2. Identifyzwhichz itemz isznotzonezofzthezsixzpartszofzthez financialzsystem.za.
Financialz instruments
b.zCentralzbankszc.
Creditzcards
d.zFinancialzinstitutions
z Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThin
kingz Blooms:zRemember
Topic:zThezSixzPartszofzthezFinancialzSystem
3. ThezcentralzbankzofzthezUnitedz Stateszis:
a. thez BankzofzAmerica
b. thez FederalzReservez System
c. thez U.S.zTreasury
d. Citibank
z Ans:zB
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zRemember
Topic:zThezSixzPartszofzthezFinancialzSystem
1
© z2017zbyzMcGraw-
HillzEducation. z Thiszis zproprietaryzmaterialzsolelyzfor zauthorizedzinstructor zuse.zNotzauthorizedzfor zsalezor zdistribution zinzanyz mann
er.z This zdocument zmayznot zbezcopied,zscanned,zduplicated, zforwarded, zdistributed, zorzpostedzonzaz website,zinz wholezor zpart.
about:blank 1/153
,9/4/23,z8:23zPM Testzbankzfullzbankingz-ztestzbankszforzmacroeconomics
4. Identifyzwhichzofzthez followingz isz notzonezofzthez fivezcorezprincipleszofz moneyzandzbanking.za.
Riskzrequiresz compensation
b.zTimezhasz value
c.zInformationziszthezbasiszforzdecisionszd.z Stabi
lityzcreateszrisk
Ans:zD
Difficulty:z01zEasy
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
z Blooms:zRemember
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
5. Investingz inz financialz instrumentsz inz today'sz economy:
a. iszanzactivityz practicedzonlyzbyzthezwealthy.
b. involvesz costlyz transactions.
c. requireszazrelativelyz largezsumzofz moneyztozinvestz(morez thanz$100,000).
d. iszmadezeasierzbyzthezusezofzmutualzfunds
.z Ans:zD
Difficulty:z02zMedium
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
6. Whichzofzthez followingz iszanzexamplezofz azfinancialz market?
a. Az localz coffeehousez wherezpeoplez regularlyz buyzandz sellz financialz instruments.
b. Azbankzthatzonlyzacceptszdepositszandz issueszloans.
c. Anzelectronicz networkz usedz forzbuyingz andz sellingztextbooks.
d. Azcentralzbankzusedzforzraisingztaxeszandzborrowingzonzbehalfzofzthezgovernmen
t.z Ans:zA
Difficulty:z02zMedium
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezSixzPartszofzthezFinancialzSystem
7. Thezamountz ofz informationz anz individualz wouldzseekz beforez makingz azdecision:
a. iszaboutzthezsamezacrosszallz individuals.
b. varieszdirectlyzwithzthez importancezofzthez decision.
c. iszthezsamezacrosszallzdecisionszbutz variesz acrosszindividuals.
d. dependszonzhowzmuchztimezitzwillztakeztozgetzthezinformationzregardlesszofzthezdecisio
n.z Ans:zB
Difficulty:z02zMedium
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
2
© z2017zbyzMcGraw-
HillzEducation. z Thiszis zproprietaryzmaterialzsolelyzfor zauthorizedzinstructor zuse.zNotzauthorizedzfor zsalezor zdistribution zinzanyz mann
er.z This zdocument zmayznot zbezcopied,zscanned,zduplicated, zforwarded, zdistributed, zorzpostedzonzaz website,zinz wholezor zpart.
about:blank 2/153
,9/4/23,z8:23zPM Testzbankzfullzbankingz-ztestzbankszforzmacroeconomics
Blooms:z Understand
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
8. Thez statementz "riskz requiresz compensation"z impliesz thatz people:
a. doznotztakezrisk.
b. onlyzacceptz riskzwhenztheyzabsolutelyz havez to.
c. willzonlyzacceptzriskzwhenztheyzarezrewardedzforzdoingzso.
d. avoidzriskzatzallzcost
.
Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
9. Mutualz fundsz have:
a. beenzcreatedz forzveryz wealthyz individualsz withzazlotzofz moneyztoz invest.
b. increasedzthez riskszassociatedz withz constructingzaz portfolio.
c. reducedzthez costsz associatedz withz gatheringz informationz onz stocksz andz bonds.
d. increasedztheztransactionszcostszassociatedzwithzparticipatingzinzfinancialzmarkets
.z Ans:zC
Difficulty:z02zMedium
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
10. Centralzbankszcanz improvezthezwelfarezofz azsocietyzbyzdoingzallzofz thez followingzexcept:
a. servingz thez interestszofz governmentzratherz thanzthezpubliczatz large.
b. helpingztoz promotez economicz growth.
c. focusingzonzkeepingzthezoverallz levelzofzpriceszstable.
d. helpingztozreducezthezvolatilityzofzbusinesszcycles
.z Ans:zA
Difficulty:z02zMedium
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezSixzPartszofzthezFinancialzSystem
11. InzthezUnitedzStates,zcontrolzofzthez quantityzofz moneyz iszgivenztozthe:
a. President.
3
© z2017zbyzMcGraw-
HillzEducation. z Thiszis zproprietaryzmaterialzsolelyzfor zauthorizedzinstructor zuse.zNotzauthorizedzfor zsalezor zdistribution zinzanyz mann
er.z This zdocument zmayznot zbezcopied,zscanned,zduplicated, zforwarded, zdistributed, zorzpostedzonzaz website,zinz wholezor zpart.
about:blank 3/153
, 9/4/23,z8:23zPM Testzbankzfullzbankingz-ztestzbankszforzmacroeconomics
b. Federalz Reservez System.
c. Bureauzofz Printingzandz Engraving.
d. DepartmentzofzthezTreasury.
z Ans:zB
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zRemember
Topic:zThezSixzPartszofzthezFinancialzSystem
12. Whichzofz thez followingz statementszbestz describesz financialz instruments?
a. Allz financialz instrumentszarez azmeanszofz payment.
b. Financialz instrumentsz canz transferz resourcesz betweenz peoplez butz notz risk.
c. Financialz instrumentsz canz transferz resourcesz andz riskz betweenz people.
d. Financialzinstrumentszcanztransferzriskzbutznotzresourceszbetweenzpeople
.z Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezSixzPartszofzthezFinancialzSystem
13. Whichzofz thez followingz statementszbestz describesz financialz markets?
a. Financialzmarketszlowerzthezcostzandzincreasezthezspeedzofzbuyingzandzsellingzfinancia
lz instruments.
b. Financialzmarketszincreasezthezspeedzofzbuyingzandzselling,zbutztheyzalsozincreasezthezco
stz sincezpeoplezarezearningzfeeszforztheseztransactions.
c. Financialz marketsz arez az goodz examplez ofz unregulatedz markets.
d. Financialzmarketsztodayzofferzfewerzinstrumentszthanztheyzdidzinzthezpast
.z Ans:zA
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezSixzPartszofzthezFinancialzSystem
14. ThezNewzYorkzStockzExchangeziszanzexamplezofza:
a. financialz instrument.
b. financialz institution.
c. financialz market.
d. bank.
Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zRemember
4
© z2017zbyzMcGraw-
HillzEducation. z Thiszis zproprietaryzmaterialzsolelyzfor zauthorizedzinstructor zuse.zNotzauthorizedzfor zsalezor zdistribution zinzanyz mann
er.z This zdocument zmayznot zbezcopied,zscanned,zduplicated, zforwarded, zdistributed, zorzpostedzonzaz website,zinz wholezor zpart.
about:blank 4/153
Chapterz 01
AnzIntroductionz tozMoneyz andz thez Financialz System
Multiple-Choicez Questions
1. Identifyzwhichz itemz isznotzonezofzthezsixzpartszofzthez financialzsystem.za.
Financialz markets
b.zCentralzbankszc.
Creditzcards
d.zFinancialzinstitutions
z Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zRemember
Topic:zThezSixzPartszofzthezFinancialzSystem
2. Identifyzwhichz itemz isznotzonezofzthezsixzpartszofzthez financialzsystem.za.
Financialz instruments
b.zCentralzbankszc.
Creditzcards
d.zFinancialzinstitutions
z Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThin
kingz Blooms:zRemember
Topic:zThezSixzPartszofzthezFinancialzSystem
3. ThezcentralzbankzofzthezUnitedz Stateszis:
a. thez BankzofzAmerica
b. thez FederalzReservez System
c. thez U.S.zTreasury
d. Citibank
z Ans:zB
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zRemember
Topic:zThezSixzPartszofzthezFinancialzSystem
1
© z2017zbyzMcGraw-
HillzEducation. z Thiszis zproprietaryzmaterialzsolelyzfor zauthorizedzinstructor zuse.zNotzauthorizedzfor zsalezor zdistribution zinzanyz mann
er.z This zdocument zmayznot zbezcopied,zscanned,zduplicated, zforwarded, zdistributed, zorzpostedzonzaz website,zinz wholezor zpart.
about:blank 1/153
,9/4/23,z8:23zPM Testzbankzfullzbankingz-ztestzbankszforzmacroeconomics
4. Identifyzwhichzofzthez followingz isz notzonezofzthez fivezcorezprincipleszofz moneyzandzbanking.za.
Riskzrequiresz compensation
b.zTimezhasz value
c.zInformationziszthezbasiszforzdecisionszd.z Stabi
lityzcreateszrisk
Ans:zD
Difficulty:z01zEasy
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
z Blooms:zRemember
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
5. Investingz inz financialz instrumentsz inz today'sz economy:
a. iszanzactivityz practicedzonlyzbyzthezwealthy.
b. involvesz costlyz transactions.
c. requireszazrelativelyz largezsumzofz moneyztozinvestz(morez thanz$100,000).
d. iszmadezeasierzbyzthezusezofzmutualzfunds
.z Ans:zD
Difficulty:z02zMedium
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
6. Whichzofzthez followingz iszanzexamplezofz azfinancialz market?
a. Az localz coffeehousez wherezpeoplez regularlyz buyzandz sellz financialz instruments.
b. Azbankzthatzonlyzacceptszdepositszandz issueszloans.
c. Anzelectronicz networkz usedz forzbuyingz andz sellingztextbooks.
d. Azcentralzbankzusedzforzraisingztaxeszandzborrowingzonzbehalfzofzthezgovernmen
t.z Ans:zA
Difficulty:z02zMedium
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezSixzPartszofzthezFinancialzSystem
7. Thezamountz ofz informationz anz individualz wouldzseekz beforez makingz azdecision:
a. iszaboutzthezsamezacrosszallz individuals.
b. varieszdirectlyzwithzthez importancezofzthez decision.
c. iszthezsamezacrosszallzdecisionszbutz variesz acrosszindividuals.
d. dependszonzhowzmuchztimezitzwillztakeztozgetzthezinformationzregardlesszofzthezdecisio
n.z Ans:zB
Difficulty:z02zMedium
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
2
© z2017zbyzMcGraw-
HillzEducation. z Thiszis zproprietaryzmaterialzsolelyzfor zauthorizedzinstructor zuse.zNotzauthorizedzfor zsalezor zdistribution zinzanyz mann
er.z This zdocument zmayznot zbezcopied,zscanned,zduplicated, zforwarded, zdistributed, zorzpostedzonzaz website,zinz wholezor zpart.
about:blank 2/153
,9/4/23,z8:23zPM Testzbankzfullzbankingz-ztestzbankszforzmacroeconomics
Blooms:z Understand
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
8. Thez statementz "riskz requiresz compensation"z impliesz thatz people:
a. doznotztakezrisk.
b. onlyzacceptz riskzwhenztheyzabsolutelyz havez to.
c. willzonlyzacceptzriskzwhenztheyzarezrewardedzforzdoingzso.
d. avoidzriskzatzallzcost
.
Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
9. Mutualz fundsz have:
a. beenzcreatedz forzveryz wealthyz individualsz withzazlotzofz moneyztoz invest.
b. increasedzthez riskszassociatedz withz constructingzaz portfolio.
c. reducedzthez costsz associatedz withz gatheringz informationz onz stocksz andz bonds.
d. increasedztheztransactionszcostszassociatedzwithzparticipatingzinzfinancialzmarkets
.z Ans:zC
Difficulty:z02zMedium
LearningzObjective:z01-
02z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezFivezCorezPrincipleszofzMoneyzandzBanking
10. Centralzbankszcanz improvezthezwelfarezofz azsocietyzbyzdoingzallzofz thez followingzexcept:
a. servingz thez interestszofz governmentzratherz thanzthezpubliczatz large.
b. helpingztoz promotez economicz growth.
c. focusingzonzkeepingzthezoverallz levelzofzpriceszstable.
d. helpingztozreducezthezvolatilityzofzbusinesszcycles
.z Ans:zA
Difficulty:z02zMedium
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezSixzPartszofzthezFinancialzSystem
11. InzthezUnitedzStates,zcontrolzofzthez quantityzofz moneyz iszgivenztozthe:
a. President.
3
© z2017zbyzMcGraw-
HillzEducation. z Thiszis zproprietaryzmaterialzsolelyzfor zauthorizedzinstructor zuse.zNotzauthorizedzfor zsalezor zdistribution zinzanyz mann
er.z This zdocument zmayznot zbezcopied,zscanned,zduplicated, zforwarded, zdistributed, zorzpostedzonzaz website,zinz wholezor zpart.
about:blank 3/153
, 9/4/23,z8:23zPM Testzbankzfullzbankingz-ztestzbankszforzmacroeconomics
b. Federalz Reservez System.
c. Bureauzofz Printingzandz Engraving.
d. DepartmentzofzthezTreasury.
z Ans:zB
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zRemember
Topic:zThezSixzPartszofzthezFinancialzSystem
12. Whichzofz thez followingz statementszbestz describesz financialz instruments?
a. Allz financialz instrumentszarez azmeanszofz payment.
b. Financialz instrumentsz canz transferz resourcesz betweenz peoplez butz notz risk.
c. Financialz instrumentsz canz transferz resourcesz andz riskz betweenz people.
d. Financialzinstrumentszcanztransferzriskzbutznotzresourceszbetweenzpeople
.z Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezSixzPartszofzthezFinancialzSystem
13. Whichzofz thez followingz statementszbestz describesz financialz markets?
a. Financialzmarketszlowerzthezcostzandzincreasezthezspeedzofzbuyingzandzsellingzfinancia
lz instruments.
b. Financialzmarketszincreasezthezspeedzofzbuyingzandzselling,zbutztheyzalsozincreasezthezco
stz sincezpeoplezarezearningzfeeszforztheseztransactions.
c. Financialz marketsz arez az goodz examplez ofz unregulatedz markets.
d. Financialzmarketsztodayzofferzfewerzinstrumentszthanztheyzdidzinzthezpast
.z Ans:zA
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zUnderstand
Topic:zThezSixzPartszofzthezFinancialzSystem
14. ThezNewzYorkzStockzExchangeziszanzexamplezofza:
a. financialz instrument.
b. financialz institution.
c. financialz market.
d. bank.
Ans:zC
Difficulty:z01zEasy
LearningzObjective:z01-
01z AACSB:zReflectivezThinking
z Blooms:zRemember
4
© z2017zbyzMcGraw-
HillzEducation. z Thiszis zproprietaryzmaterialzsolelyzfor zauthorizedzinstructor zuse.zNotzauthorizedzfor zsalezor zdistribution zinzanyz mann
er.z This zdocument zmayznot zbezcopied,zscanned,zduplicated, zforwarded, zdistributed, zorzpostedzonzaz website,zinz wholezor zpart.
about:blank 4/153
