The Economics Of Money Banking And Financial Markets 6th Canadian Edition By Mishkin - Test Bank

Economics of Money, Banking, and Financial Markets 6e (Mishkin)

Chapter 1   Why Study Money, Banking, and Financial Markets?

1.1   Why Study Financial Markets?

1) Financial markets promote economic efficiency by ________.

A) channelling funds from investors to savers

B) creating inflation

C) channelling funds to those who have a productive use for them

D) reducing investment

Answer:  C

Diff: 1      Type: MC

Skill:  Recall

Objective:  1.1 Recognize the importance of financial markets in the economy.

2) Well-functioning financial markets promote ________.

A) inflation

B) deflation

C) unemployment

D) economic growth

Answer:  D

Diff: 1      Type: MC

Skill:  Recall

Objective:  1.1 Recognize the importance of financial markets in the economy.

3) 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

Diff: 1      Type: MC

Skill:  Recall

Objective:  1.1 Recognize the importance of financial markets in the economy.

4) Markets in which funds are transferred from those who do not have a productive use for them to those who do are called ________.

A) commodity markets

B) fund-available markets

C) derivative exchange markets

D) financial markets

Answer:  D

Diff: 1      Type: MC

Skill:  Recall

Objective:  1.1 Recognize the importance of financial markets in the economy.

5) ________ markets transfer funds from people who do not have a productive use for them to people who do.

A) Commodity

B) Fund-available

C) Financial

D) Derivative exchange

Answer:  C

Diff: 1      Type: MC

Skill:  Recall

Objective:  1.1 Recognize the importance of financial markets in the economy.

6) Poorly performing financial markets can be the cause of ________.

A) wealth

B) poverty

C) financial stability

D) financial expansion

Answer:  B

Diff: 1      Type: MC

Skill:  Recall

Objective:  1.1 Recognize the importance of financial markets in the economy.