The Economics of Money, Banking and Financial Markets (11th 11E - Mishkin - TB chapter 2

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1、EconomicsofMoney,Banking,andFinancialMarkets,11e(Mishkin)Chapter2AnOverviewoftheFinancialSystem2.1FunctionofFinancialMarkets1)Everyfinancialmarkethasthefollowingcharacteristic.A)Itdeterminesthelevelofinterestrates.B)Itallowscommonstocktobetraded.C)Itallowsloanstobemade.D)Itchannelsfundsfromlend

2、ers-saverstoborrowers-spenders.Answer:DAACSB:ReflectiveThinking2)FinancialmarketshavethebasicfunctionofA)gettingpeoplewithfundstolendtogetherwithpeoplewhowanttoborrowfunds.B)assuringthattheswingsinthebusinesscyclearelesspronounced.C)assuringthatgovernmentsneedneverresorttoprintingmoney.D)provid

3、ingarisk-freerepositoryofspendingpower.Answer:AAACSB:ReflectiveThinking3)FinancialmarketsimproveeconomicwelfarebecauseA)theychannelfundsfrominvestorstosavers.B)theyallowconsumerstotimetheirpurchasebetter.C)theyweedoutinefficientfirms.D)theyeliminatetheneedforindirectfinance.Answer:BAACSB:Reflec

4、tiveThinking4)Well-functioningfinancialmarketsA)causeinflation.B)eliminatetheneedforindirectfinance.C)causefinancialcrises.D)allowtheeconomytooperatemoreefficiently.Answer:DAACSB:ReflectiveThinking5)AbreakdownoffinancialmarketscanresultinA)financialstability.B)rapideconomicgrowth.C)politicalins

5、tability.D)stableprices.Answer:CAACSB:ReflectiveThinking28Copyright©2016PearsonEducation,Inc.6)Theprincipallender-saversareA)governments.B)businesses.C)households.D)foreigners.Answer:CAACSB:ApplicationofKnowledge7)Whichofthefollowingcanbedescribedasdirectfinance?A)Youtakeoutamortgagefromyourloc

6、albank.B)Youborrow$2500fromafriend.C)Youbuysharesofcommonstockinthesecondarymarket.D)Youbuysharesinamutualfund.Answer:BAACSB:AnalyticalThinking8)Assumethatyouborrow$2000at10%annualinteresttofinanceanewbusinessproject.Forthisloantobeprofitable,theminimumamountthisprojectmustgenerateinannualearni

7、ngsisA)$400.B)$201.C)$200.D)$199.Answer:BAACSB:AnalyticalThinking9)Youcanborrow$5000tofinanceanewbusinessventure.Thisnewventurewillgenerateannualearningsof$251.Themaximuminterestratethatyouwouldpayontheborrowedfundsandstillincreas