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Test Bank
Economics of Money, Banking and Financial Markets, 13th Edition
by Frederic Mishkin
All Chapters| Latest Edition| 100% Verified Answers
C
LE
ST
BE
1
, BESTLEC
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
C
Question Status: Previous Edition AACSB: Reflective Thinking
2)
LE
Financial markets promote greater economic efficiency by channeling funds from
to .
ST
A) investors; savers
B) borrowers; savers
C) savers; borrowers
BE
D) savers; lenders
Answer: C
Question Status: Previous Edition AACSB: Reflective Thinking
3) Well-functioning financial markets promote
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Answer: D
2
, BESTLEC
Question 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
Question Status: Previous Edition AACSB: Reflective Thinking
C
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
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A) commodity markets.
B) fund-available markets.
ST
C) derivative exchange markets.
D) financial markets.
Answer: D
BE
Question Status: Previous Edition AACSB: Application of Knowledge
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
Question Status: Previous Edition AACSB: Application of Knowledge
3
, BESTLEC
7) Poorly performing financial markets can be the cause of
A) wealth.
B) poverty.
C) financial stability.
D) financial expansion.
Answer: B
Question 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.
C
B) the markets where foreign exchange rates are determined.
C) the markets where interest rates are determined.
D)
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the markets where all borrowers get their funds.
Answer: C
ST
Question Status: Previous Edition AACSB: Reflective Thinking
9) The price paid for the rental of borrowed funds (usually expressed as a percentage of the
BE
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 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
4
Test Bank
Economics of Money, Banking and Financial Markets, 13th Edition
by Frederic Mishkin
All Chapters| Latest Edition| 100% Verified Answers
C
LE
ST
BE
1
, BESTLEC
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
C
Question Status: Previous Edition AACSB: Reflective Thinking
2)
LE
Financial markets promote greater economic efficiency by channeling funds from
to .
ST
A) investors; savers
B) borrowers; savers
C) savers; borrowers
BE
D) savers; lenders
Answer: C
Question Status: Previous Edition AACSB: Reflective Thinking
3) Well-functioning financial markets promote
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Answer: D
2
, BESTLEC
Question 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
Question Status: Previous Edition AACSB: Reflective Thinking
C
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
LE
A) commodity markets.
B) fund-available markets.
ST
C) derivative exchange markets.
D) financial markets.
Answer: D
BE
Question Status: Previous Edition AACSB: Application of Knowledge
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
Question Status: Previous Edition AACSB: Application of Knowledge
3
, BESTLEC
7) Poorly performing financial markets can be the cause of
A) wealth.
B) poverty.
C) financial stability.
D) financial expansion.
Answer: B
Question 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.
C
B) the markets where foreign exchange rates are determined.
C) the markets where interest rates are determined.
D)
LE
the markets where all borrowers get their funds.
Answer: C
ST
Question Status: Previous Edition AACSB: Reflective Thinking
9) The price paid for the rental of borrowed funds (usually expressed as a percentage of the
BE
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 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
4
