Economics of Money, Banking, and Financial Markets 9th Edition Test bank by Frederic Mishkin (All chapters complete, Question and Answers, Newly Updated
... [Show More] 2021)
Economics of Money, Banking, and Financial Markets 9th Edition Test bank by Frederic Mishkin (All chapters complete, Question and Answers, Newly Updated 2021)
Economics of Money, Banking, and Financial Markets 9th Edition Test
bank by Frederic Mishkin
Table of Contents
Chapter 1Why Study Money, Banking, and Financial Markets?
1
Chapter 2An Overview of the Financial System................. 20
Chapter 3What Is Money?........................................................ 43
Chapter 4Understanding Interest Rates................................ 60
Chapter 5The Behavior of Interest Rates.............................. 78
Chapter 6The Risk and Term Structure of Interest Rates111
Chapter 7The Stock Market, the Theory of Rational Expectations,
and the Efficient Market Hypothesis ................ 133
Chapter 8An Economic Analysis of Financial Structure . 150
Chapter 9Financial Crises and the Subprime Meltdown 169
Chapter 10Banking and the Management of Financial Institutions
181
Chapter 11.........Economic Analysis of Financial Regulation 208
Chapter 12.... Banking Industry: Structure and Competition 229
Chapter 13...Central Banks and the Federal Reserve System 253
Chapter 14......................................The Money Supply Process 274
Chapter 15........................................ Tools for Monetary Policy 319
Chapter 16The Conduct of Monetary Policy: Strategy and Tactics
343
Chapter 17.................................The Foreign Exchange Market 363
Chapter 18....................... The International Financial System 389
Chapter 19............................................The Demand for Money 418
Chapter 20.........................................................The ISLM Model 440
Chapter 21..Monetary and Fiscal Policy in the ISLM Model 466
Chapter 22.............Aggregate Demand and Supply Analysis 493
Chapter 23Transmission Mechanisms of Monetary Policy: The
Evidence 511
Chapter 24..................................................Money and Inflation 529
Chapter 25.... Rational Expectations: Implications for Policy 549
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
Ques Status: Previous Edition
2) Financial markets promote greater economic efficiency by channeling funds from to
.
A) investors; savers
B) borrowers; savers
C) savers; borrowers
D) savers; lenders
Answer: C
Ques Status: Previous Edition
3) Well-functioning financial markets promote
A) inflation.
B) deflation.
C) unemployment.
D) growth.
Answer: D
Ques Status: Previous Edition
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
Ques Status: New
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
A) commodity markets.
B) fund-available markets.
C) derivative exchange markets.
D) financial markets.
Answer: D
Ques Status: Previous Edition
2 Mishkin · The Economics of Money, Banking, and Financial Markets, 9
th Edition
1) 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
Ques Status: Previous Edition
2) Poorly performing financial markets can be the cause of
A) wealth.
B) poverty.
C) financial stability.
D) financial expansion.
Answer: B
Ques Status: Previous Edition
3) The bond markets are important because they are
A) easily the most widely followed financial markets in the United States.
B) the markets where foreign exchange rates are determined.
C) the markets where interest rates are determined.
D) the markets where all borrowers get their funds.
Answer: C
Ques Status: Previous Edition
4) 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
A) inflation rate.
B) exchange rate.
C) interest rate.
D) aggregate price level.
Answer: C
Ques Status: Previous Edition
5) 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
B) less; lower
C) more; higher
D) less; higher
Answer: A
Ques Status: Previous Edition
Chapter 1 Why Study Money, Banking, and Financial Markets? 3
6) The interest rate on Baa (medium quality) corporate bonds is , on average, than other
interest rates, and the spread between it and other rates became in the 1970s.
A) lower; smaller
B) lower; larger
C) higher; smaller
D) higher; larger
Answer: D
Ques Status: Previous Edition
7) Everything else held constant, a decline in interest rates will cause spending on housing to
A) fall.
B) remain unchanged.
C) either rise, fall, or remain the same.
D) rise.
Answer: D
Ques Status: Previous Edition
8) High interest rates might purchasing a house or car but at the same time high interest
rates might saving.
A) discourage; encourage
B) discourage; discourage
C) encourage; encourage
D) encourage; discourage
Answer: A
Ques Status: New
9) An increase in interest rates might saving because more can be earned in interest
income.
A) encourage
B) discourage
C) disallow
D) invalidate
Answer: A
Ques Status: Previous Edition
10) Everything else held constant, an increase in interest rates on student loans
A) increases the cost of a college education.
B) reduces the cost of a college education.
C) has no effect on educational costs.
D) increases costs for students with no loans.
Answer: A
Ques Status: Previous Edition
4 Mishkin · The Economics of Money, Banking, and Financial Markets, 9
th Edition
11) High interest rates might cause a corporation to building a new plant that would
provide more jobs.
A) complete
B) consider
C) postpone
D) contemplate
Answer: C
Ques Status: Previous Edition
12) The stock market is important because it is
A) where interest rates are determined.
B) the most widely followed financial market in the United States.
C) where foreign exchange rates are determined.
D) the market where most borrowers get their funds.
Answer: B
Ques Status: Previous Edition
13) Stock prices are
A) relatively stable trending upward at a steady pace.
B) relatively stable trending downward at a moderate rate.
C) extremely volatile.
D) unstable trending downward at a moderate rate.
Answer: C
Ques Status: Revised
14) A rising stock market index due to higher share prices
A) increases peopleʹs wealth, but is unlikely to increase their willingness to spend.
B) increases peopleʹs wealth and as a result may increase their willingness to spend.
C) decreases the amount of funds that business firms can raise by selling newly -issued stock.
D) decreases peopleʹs wealth, but is unlikely to increase their willingness to spend.
Answer: B
Ques Status: Previous Edition
15) When stock prices fall
A) an individualʹs wealth is not affected nor is their willingness to spend.
B) a business firm will be more likely to sell stock to finance investment spending.
C) an individualʹs wealth may decrease but their willingness to spend is not affected.
D) an individualʹs wealth may decrease and their willingness to spend may decrease.
Answer: D
Ques Status: Previous Edition
16) Changes in stock prices
A) do not affect peopleʹs wealth and their willingness to spend.
B) affect firmsʹ decisions to sell stock to finance investment spending.
C) occur in regular patterns.
D) are unimportant to decision makers.
Answer: B
Ques Status: Previous Edition
Chapter 1 Why Study Money, Banking, and Financial Markets? 5
17) An increase in stock prices the size of peopleʹs wealth and may their
willingness to spend, everything else held constant.
A) increases; increase
B) increases; decrease
C) decreases; increase
D) decreases; decrease
Answer: A
Ques Status: Previous Edition
18) Low stock market prices might consumers willingness to spend and might
businesses willingness to undertake investment projects.
A) increase; increase
B) increase; decrease
C) decrease; decrease
D) decrease; increase
Answer: C
Ques Status: New
19) Fear of a major recession causes stock prices to fall, everything else held constant, which in turn
causes consumer spending to
A) increase.
B) remain unchanged.
C) decrease.
D) cannot be determined.
Answer: C
Ques Status: Previous Edition
20) A share of common stock is a claim on a corporationʹs
A) debt.
B) liabilities.
C) expenses.
D) earnings and assets.
Answer: D
Ques Status: Revised
21) On , October 19, 1987, the market experienced its worst one-day drop in its entire
history with the DIJA falling by more than 500 points.
A) ʺTerrible Tuesdayʺ
B) ʺWoeful Wednesdayʺ
C) ʺFreaky Fridayʺ
D) ʺBlack Mondayʺ
Answer: D
Ques Status: Previous Edition
6 Mishkin · The Economics of Money, Banking, and Financial Markets, 9
th Edition
22) The decline in stock prices from 2000 through 2002
A) increased individualsʹ willingness to spend.
B) had no effect on individual spending.
C) reduced individualsʹ willingness to spend.
D) increased individual wealth.
Answer: C
Ques Status: Previous Edition
23) The Dow reached a peak of over 11,000 before the collapse of the bubble in 2000.
A) housing
B) manufacturing
C) high-tech
D) banking
Answer: C
Ques Status: Previous Edition
24) What is a stock? How do stocks affect the economy?
Answer: A stock represents a share of ownership of a corporation, or a claim on a firmʹs
earnings/assets. Stocks are part of wealth, and changes in their value affect peopleʹs
willingness to spend. Changes in stock prices affect a firmʹs ability to raise funds, and
thus their investment.
Ques Status: Previous Edition
25) Why is it important to understand the bond market?
Answer: The bond market supports economic activity by enabling the government and
corporations to borrow to undertake their projects and it is the market where interest
rates are determined.
Ques Status: New
2.2 Why Study Financial Institutions and Banking?
1) Channeling funds from individuals with surplus funds to those desiring funds when the saver
does not purchase the borrowerʹs security is known as
A) barter.
B) redistribution.
C) financial intermediation.
D) taxation.
Answer: C
Ques Status: Previous Edition
2) A financial crisis is
A) not possible in the modern financial environment.
B) a major disruption in the financial markets.
C) a feature of developing economies only.
D) typically followed by an economic boom.
Answer: B
Ques Status: New [Show Less]