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The Economics Of Money Banking And Financial Markets 6th Canadian Edition By Mishkin - Test Bank
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The Economics of Money, Banking,
and Financial Markets
Sixth Canadian Edition
Frederic S. Mishkin
Columbia University
Apostolos Serletis
University of Calgary
Prepared by
Lance Shandler
Kwantlen Polytechnic University
Toronto
ISBN 978-0-13-438210-4
Copyright © 2017 Pearson Canada Inc., Toronto, Ontario. All rights reserved. This work is protected by Canadian
copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student
learning. Dissemination or sale of any part of this work (including on the Internet) will destroy the integrity of the
work and is not permitted. The copyright holder grants permission to instructors who have adopted The Economics
of Money, Banking, and Financial Markets, Sixth Canadian Edition, by Mishkin and Serletis, to post this material
online only if the use of the website is restricted by access codes to students in the instructor’s class that is using
the textbook and provided the reproduced material bears this copyright notice.
,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.
1
Copyright © 2017 Pearson Canada, Inc.
, 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.
7) The bond markets are important because they are ________.
A) easily the most widely followed financial markets in Canada
B) the markets where foreign exchange rates are determined
C) where corporations and governments borrow to finance their activities
D) the markets where all borrowers get their funds
Answer: C
Diff: 1 Type: MC
Skill: Recall
Objective: 1.1 Recognize the importance of financial markets in the economy.
8) A security is also known as ________.
A) a financial instrument
B) a contingent claim
C) the interest rate
D) a liability
Answer: A
Diff: 1 Type: MC
Skill: Applied
Objective: 1.1 Recognize the importance of financial markets in the economy.
2
Copyright © 2017 Pearson Canada, Inc.
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