AbelTestBankChapter1.docx

AbelTestBankChapter1.docx

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AbelTestBankChapter1

EconomicsofMoney,Banking&FinancialMarkets,5e（Mishkin）

Chapter1WhyStudyMoney,Banking,andFinancialMarkets?

1.1WhyStudyFinancialMarkets?

1）Financialmarketspromoteeconomicefficiencyby________.

A）channellingfundsfrominvestorstosavers

B）creatinginflation

C）channellingfundstothosewhohaveaproductiveuseforthem

D）reducinginvestment

Answer:

C

Diff:

1Type:

MCPageRef:

2

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

2）Well-functioningfinancialmarketspromote________.

A）inflation

B）deflation

C）unemployment

D）economicgrowth

Answer:

D

Diff:

1Type:

MCPageRef:

2-3

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

3）Akeyfactorinproducinghigheconomicgrowthis________.

A）eliminatingforeigntrade

B）well-functioningfinancialmarkets

C）highinterestrates

D）stockmarketvolatility

Answer:

B

Diff:

1Type:

MCPageRef:

2-3

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

4）Marketsinwhichfundsaretransferredfromthosewhodonothaveaproductiveuseforthemtothosewhodoarecalled________.

A）commoditymarkets

B）fund-availablemarkets

C）derivativeexchangemarkets

D）financialmarkets

Answer:

D

Diff:

1Type:

MCPageRef:

2-3

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

5）________marketstransferfundsfrompeoplewhodonothaveaproductiveuseforthemtopeoplewhodo.

A）Commodity

B）Fund-available

C）Financial

D）Derivativeexchange

Answer:

C

Diff:

1Type:

MCPageRef:

2-3

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

6）Poorlyperformingfinancialmarketscanbethecauseof________.

A）wealth

B）poverty

C）financialstability

D）financialexpansion

Answer:

B

Diff:

1Type:

MCPageRef:

3

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

7）Thebondmarketsareimportantbecausetheyare________.

A）easilythemostwidelyfollowedfinancialmarketsinCanada

B）themarketswhereforeignexchangeratesaredetermined

C）wherecorporationsandgovernmentsborrowtofinancetheiractivities

D）themarketswhereallborrowersgettheirfunds

Answer:

C

Diff:

1Type:

MCPageRef:

3

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

8）Asecurityisalsoknownas________.

A）afinancialinstrument

B）acontingentclaim

C）theinterestrate

D）aliability

Answer:

A

Diff:

1Type:

MCPageRef:

3

Skill:

Applied

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

9）Abondis________.

A）notasgoodasinvestmentasstocks

B）paysinterestsporadically

C）neverpaysinterest

D）makespaymentsperiodicallyforaspecifiedperiodoftime

Answer:

D

Diff:

1Type:

MCPageRef:

3

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

10）Thefluctuationofinterestrates________.

A）neveroccursbecausethecentralbankisinvolvedinsettingtherate

B）isduetochangesinstockprices

C）cannotoccurbecausethereisonlyoneinterestrate

D）impactsallCanadians

Answer:

D

Diff:

1Type:

MCPageRef:

3

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

11）Thecostofborrowingiscommonlyreferredtoasthe________.

A）inflationrate

B）exchangerate

C）interestrate

D）aggregatepricelevel

Answer:

C

Diff:

1Type:

MCPageRef:

3

Skill:

Recall

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

12）Comparedtointerestratesonlong-termbonds,interestratesonthree-monthTreasurybillsfluctuate________andare________onaverage.

A）more;lower

B）less;lower

C）more;higher

D）less;higher

Answer:

A

Diff:

1Type:

MCPageRef:

3

Skill:

Applied

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

13）Theinterestrateonlong-termcorporatebondsis________,onaverage,thanotherinterestrates.Thespreadbetweenitanotherrates________overtime.

A）lower;remainsconstant

B）lower;fluctuates

C）higher;remainsconstant

D）higher;fluctuates

Answer:

D

Diff:

1Type:

MCPageRef:

3

Skill:

Applied

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

14）Everythingelseheldconstant,ariseininterestrateswillcausespendingonhousingto________.

A）rise

B）remainunchanged

C）eitherrise,fall,orremainthesame

D）fall

Answer:

D

Diff:

2Type:

MCPageRef:

3

Skill:

Applied

ObjectiveList:

1.1Outlinewhatisinvolvedinthestudyoffinancialmarkets

15）Highinterestratesmight________purchasingahouseorcarbutatthesametimehighinterestr