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.
C) channeling funds from savers to investors.
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.
Financial institutions that accept deposits and make loans are called
A) exchanges.
B) banks.
C) over-the-counter markets.
D) finance companies.
B) banks.
39) The market where one currency is converted into another currency is called the ________ market.
A) stock
B) bond
C) derivatives
D) foreign exchange
D) foreign exchange
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.
C) interest rate.
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.
B) well-functioning financial markets.
) 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.
C) the markets where interest rates are determined.
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
D) a business college
Everything else constant, a stronger dollar will mean that
A) vacationing in England becomes more expensive.
B) vacationing in England becomes less expensive.
C) French cheese becomes more expensive.
D) Japanese cars become more expensive.
vacationing in England becomes less expensive.
Money is defined as
A) bills of exchange.
B) anything that is generally accepted in payment for goods and services or in the repayment of debt.
C) a risk-free repository of spending power.
D) the unrecognized liability of governments.
B) anything that is generally accepted in payment for goods and services or in the repayment of debt.
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.
B) a major disruption in the financial markets.
When tax revenues are greater than government expenditures, the government has a budget
A) crisis.
B) deficit.
C) surplus.
D) revision.
C) surplus.