The Economics of Money, Banking and Financial Markets 13th Global Edition Test bank

AACSB:  Application of Knowledge
 
10) Which of the following is NOT a financial institution?
A) a life insurance company
B) a pension fund
C) a credit union
D) a business college
Answer:  D
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
11) The delivery of financial services electronically is called
A) e-business.
B) e-commerce.
C) e-finance.
D) e-possible.
Answer:  C
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
12) What crucial role do financial intermediaries perform in an economy?
Answer:  Financial intermediaries borrow funds from people who have saved and make loans to other individuals and businesses and thus improve the efficiency of the economy.
Question Status:  Previous Edition
AACSB:  Reflective Thinking
 

 
1.3   Why Study Money and Monetary Policy?
 
1) Money is defined as
A) bills of exchange.
B) anything that is generally accepted in payment for goods or services or in the repayment of debt.
C) a risk-free repository of spending power.
D) the unrecognized liability of governments.
Answer:  B
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
2) The upward and downward movement of aggregate output produced in the economy is referred to as the
A) roller coaster.
B) see saw.
C) business cycle.
D) shock wave.
Answer:  C
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
3) Sustained downward movements in the business cycle are referred to as
A) inflation.
B) recessions.
C) economic recoveries.
D) expansions.
Answer:  B
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
4) During a recession, output declines result in
A) lower unemployment in the economy.
B) higher unemployment in the economy.
C) no impact on the unemployment in the economy.
D) higher wages for the workers.
Answer:  B
Question Status:  Previous Edition
AACSB:  Analytical Thinking
 

 
5) Prior to most recessions since 1950, there has been a drop in
A) inflation.
B) the money stock.
C) the growth rate of the money stock.
D) interest rates.
Answer:  C
Question Status:  Revised
AACSB:  Application of Knowledge
 
6) Evidence from business cycle fluctuations in the United States indicates that
A) a negative relationship between money growth and general economic activity exists.
B) recessions are usually preceded by declines in bond prices.
C) recessions are usually preceded by dollar depreciation.
D) recessions are usually preceded by a decline in the growth rate of money.
Answer:  D
Question Status:  Previous Edition
AACSB:  Reflective Thinking
 
7) ________ theory relates the quantity of money and monetary policy to changes in aggregate economic activity and inflation.
A) Monetary
B) Fiscal
C) Financial
D) Systemic
Answer:  A
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
8) A continuing increase in the growth of the money supply is likely followed by
A) a recession.
B) a depression.
C) an increase in the price level.
D) no change in the economy.
Answer:  C
Question Status:  Previous Edition
AACSB:  Reflective Thinking
 
9) It is true that inflation is a
A) continuous increase in the money supply.
B) continuous fall in prices.
C) decline in interest rates.
D) continually rising price level.
Answer:  D
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 

 
10) Which of the following is a TRUE statement?
A) Money or the money supply is defined as Federal Reserve notes.
B) The average price of goods and services in an economy is called the aggregate price level.
C) The inflation rate is measured as the rate of change in the federal government budget deficit.
D) The aggregate price level is measured as the rate of change in the inflation rate.
Answer:  B
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
11) If the prices would have been much higher ten years ago for the items the average consumer purchased last month, then one can likely conclude that
A) the aggregate price level has declined during this ten-year period.
B) the average inflation rate for this ten-year period has been positive.