Student: Inflation and Question Status

Topics: Inflation, Economics, Money supply Pages: 25 (5951 words) Published: April 16, 2014
Chapter 1
Why Study Money, Banking, and Financial Markets?
 Multiple Choice
)1 Financial markets and institutions
()a involve the movement of huge flows of money.
()b affect the profits of businesses.
()c affect the types of goods and services produced in an economy. ()d do each of the above.
()e do only (a) and (b) of the above.
Answer:
Question Status: Previous Edition
)2 Financial markets and institutions
()f involve the movement of huge flows of money.
()g affect the location of businesses.
()h affect the types of goods and services produced in an economy. ()i do each of the above.
()j do only (a) and (c) of the above.
Answer:
Question Status: Previous Edition
)3 Money, financial institutions, and financial markets in the United States can have a major impact on ()k economic well being of other countries besides the United States. ()l the kinds of goods and services that are produced.

()m the outcome of political elections.
()n all of the above.
()o only (a) and (b) of the above.
Answer:
Question Status: Previous Edition
)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 ()p commodity markets.
()q fund-available markets.
()r derivative exchange markets.
()s financial markets.
Answer:
Question Status: Previous Edition
)5 Channeling funds from individuals with surplus funds to those desiring funds when the saver does not purchase the borrower’s security is known as ()t barter.
()u redistribution.
()v theft.
()w taxation.
()x financial intermediation.
Answer:
Question Status: Study Guide
)6 Financial markets promote economic efficiency by
()y channeling funds from investors to savers.
()z creating inflation.
()aa causing recessions.
()bb channeling funds from savers to investors.
()cc reducing investment.
Answer:
Question Status: New
)7 Well-functioning financial markets promote
()dd inflation.
()ee deflation.
()ff unemployment.
()gg growth.
()hh none of the above.
Answer:
Question Status: New
)8 Poorly performing financial markets can be the cause of
()ii wealth.
()jj poverty.
()kk financial stability.
()ll all of the above.
()mm none of the above.
Answer:
Question Status: New
)9 The bond markets are important because
()nn they are easily the most widely followed financial markets in the United States. ()oo they are the markets where foreign exchange rates are determined. ()pp they are the markets where interest rates are determined. ()qq of each of the above.

()rr of only (a) and (b) of the above.
Answer:
Question Status: Previous Edition
)10 The bond markets are important because
()ss they are the markets where interest rates are determined. ()tt they are the markets where most borrowers get their funds. ()uu they are easily the most widely followed financial markets in the United States. ()vv of each of the above.

()ww of only (a) and (b) of the above.
Answer:
Question Status: Previous Edition
)11 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 ()xx inflation rate.
()yy exchange rate.
()zz interest rate.
()aaa aggregate price level.
Answer:
Question Status: Previous Edition
)12 Compared to interest rates on long-term U.S. government bonds, interest rates on _____ fluctuate more and are lower on average. ()bbb medium-quality corporate bonds
()ccc low-quality corporate bonds
()ddd high-quality corporate bonds
()eee three-month Treasury bills
()fff none of the above
Answer:
Question Status: Previous Edition
)13 Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury bills fluctuate _____ and are _____ on average. ()ggg more; lower
()hhh less; lower
()iii more; higher
()jjj less; higher
Answer:
Question Status: Previous Edition
)14 The interest rate on Baa (medium quality) corporate...
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