Question 1

American companies can borrow funds

Accepted Answer

A) only in U.S. financial markets. 
B) only in foreign financial markets. 
C) in both U.S. and foreign financial markets. 
D) only from the U.S. government. 
A) only in U.S. financial markets. 
B) only in foreign financial markets. 
C) in both U.S. and foreign financial markets. 
D) only from the U.S. government.

Question 2

Using a unified analytic framework to present the information in the text keeps the knowledge

Accepted Answer

A) focused on theories that have little to do with actual behavior. 
B) theoretical and uninteresting. 
C) abstract and not applicable to real life. 
D) from becoming obsolete. 
A) focused on theories that have little to do with actual behavior. 
B) theoretical and uninteresting. 
C) abstract and not applicable to real life. 
D) from becoming obsolete.

Question 3

When prices are measured in terms of fixed (base-year)prices they are called ________ prices.

Accepted Answer

A) nominal 
B) real 
C) inflated 
D) aggregate 
A) nominal 
B) real 
C) inflated 
D) aggregate

Question 4

The bond markets are important because they are

Accepted Answer

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. 
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.

Question 5

From 1950-2017 the price level in the United States increased more than

Accepted Answer

A) twofold. 
B) threefold. 
C) sixfold. 
D) tenfold. 
A) twofold. 
B) threefold. 
C) sixfold. 
D) tenfold.

Question 6

If the CPI is 120 in 1996 and 180 in 2002,then between 1996 and 2002,prices have increased by

Accepted Answer

A) 180%. 
B) 80%. 
C) 60%. 
D) 50%. 
A) 180%. 
B) 80%. 
C) 60%. 
D) 50%.

Question 7

Everything else held constant,a stronger dollar benefits ________ and hurts ________.

Accepted Answer

A) American businesses;American consumers 
B) American businesses;foreign businesses 
C) American consumers;American businesses 
D) foreign businesses;American consumers 
A) American businesses;American consumers 
B) American businesses;foreign businesses 
C) American consumers;American businesses 
D) foreign businesses;American consumers

Question 8

The measure of the aggregate price level that is frequently the focus of Federal Reserve officials is the

Accepted Answer

A) consumer price index. 
B) producer price index. 
C) GDP deflator. 
D) PCE deflator. 
A) consumer price index. 
B) producer price index. 
C) GDP deflator. 
D) PCE deflator.

Question 9

From 1980 to early 1985 the dollar ________ in value,thereby benefiting American ________.

Accepted Answer

A) appreciated;consumers 
B) appreciated;businesses 
C) depreciated;consumers 
D) depreciated;businesses 
A) appreciated;consumers 
B) appreciated;businesses 
C) depreciated;consumers 
D) depreciated;businesses

Question 10

It is true that inflation is a

Accepted Answer

A) continuous increase in the money supply. 
B) continuous fall in prices. 
C) decline in interest rates. 
D) continually rising price level. 
A) continuous increase in the money supply. 
B) continuous fall in prices. 
C) decline in interest rates. 
D) continually rising price level.

Question 11

If your nominal income in 2014 was $50,000,and prices doubled between 2014 and 2017,to have the same real income,your nominal income in 2017 must be

Accepted Answer

A) $50,000. 
B) $75,000. 
C) $90,000. 
D) $100,000. 
A) $50,000. 
B) $75,000. 
C) $90,000. 
D) $100,000.

Question 12

Which of the following is most likely to result from a stronger dollar?

Accepted Answer

A) U)S. goods exported aboard will cost less in foreign countries,and so foreigners will buy more of them. 
B) U)S. goods exported aboard will cost more in foreign countries and so foreigners will buy more of them. 
C) U)S. goods exported abroad will cost more in foreign countries,and so foreigners will buy fewer of them. 
D) Americans will purchase fewer foreign goods. 
A) U)S. goods exported aboard will cost less in foreign countries,and so foreigners will buy more of them. 
B) U)S. goods exported aboard will cost more in foreign countries and so foreigners will buy more of them. 
C) U)S. goods exported abroad will cost more in foreign countries,and so foreigners will buy fewer of them. 
D) Americans will purchase fewer foreign goods.

Question 13

Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called

Accepted Answer

A) commodity markets. 
B) fund-available markets. 
C) derivative exchange markets. 
D) financial markets. 
A) commodity markets. 
B) fund-available markets. 
C) derivative exchange markets. 
D) financial markets.

Question 14

The most comprehensive measure of aggregate output is

Accepted Answer

A) gross domestic product. 
B) net national product. 
C) the stock value of the industrial 500. 
D) national income. 
A) gross domestic product. 
B) net national product. 
C) the stock value of the industrial 500. 
D) national income.

Question 15

The financial intermediaries that the average person interacts with most frequently are

Accepted Answer

A) exchanges. 
B) over-the-counter markets. 
C) finance companies. 
D) banks. 
A) exchanges. 
B) over-the-counter markets. 
C) finance companies. 
D) banks.

Question 16

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

Accepted Answer

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. 
C) the average rate of money growth for this ten-year period has been positive. 
D) the aggregate price level has risen during this ten-year period. 
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. 
C) the average rate of money growth for this ten-year period has been positive. 
D) the aggregate price level has risen during this ten-year period.

Question 17

Changes in stock prices

Accepted Answer

A) do not affect people's wealth and their willingness to spend. 
B) affect firms' decisions to sell stock to finance investment spending. 
C) occur in regular patterns. 
D) are unimportant to decision makers. 
A) do not affect people's wealth and their willingness to spend. 
B) affect firms' decisions to sell stock to finance investment spending. 
C) occur in regular patterns. 
D) are unimportant to decision makers.

Question 18

The organization responsible for the conduct of monetary policy in the United States is the

Accepted Answer

A) Comptroller of the Currency. 
B) U)S. Treasury. 
C) Federal Reserve System. 
D) Bureau of Monetary Affairs. 
A) Comptroller of the Currency. 
B) U)S. Treasury. 
C) Federal Reserve System. 
D) Bureau of Monetary Affairs.

Question 19

The market where one currency is converted into another currency is called the ________ market.

Accepted Answer

A) stock 
B) bond 
C) derivatives 
D) foreign exchange 
A) stock 
B) bond 
C) derivatives 
D) foreign exchange

Question 20

If nominal GDP in 2001 is $9 trillion,and 2001 real GDP in 1996 prices is $6 trillion,the GDP deflator price index is

Accepted Answer

A) 7. 
B) 100. 
C) 150. 
D) 200. 
A) 7. 
B) 100. 
C) 150. 
D) 200.

Exam 1: Why Study Money, banking, and Financial Markets

American companies can borrow funds

Using a unified analytic framework to present the information in the text keeps the knowledge

When prices are measured in terms of fixed (base-year)prices they are called ________ prices.

The bond markets are important because they are

From 1950-2017 the price level in the United States increased more than

If the CPI is 120 in 1996 and 180 in 2002,then between 1996 and 2002,prices have increased by

Everything else held constant,a stronger dollar benefits ________ and hurts ________.

The measure of the aggregate price level that is frequently the focus of Federal Reserve officials is the

From 1980 to early 1985 the dollar ________ in value,thereby benefiting American ________.

It is true that inflation is a

If your nominal income in 2014 was $50,000,and prices doubled between 2014 and 2017,to have the same real income,your nominal income in 2017 must be

Which of the following is most likely to result from a stronger dollar?

Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called

The most comprehensive measure of aggregate output is

The financial intermediaries that the average person interacts with most frequently are

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

Changes in stock prices

The organization responsible for the conduct of monetary policy in the United States is the

The market where one currency is converted into another currency is called the ________ market.

If nominal GDP in 2001 is $9 trillion,and 2001 real GDP in 1996 prices is $6 trillion,the GDP deflator price index is

An Overview of the Financial System

What Is Money

The Meaning of Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Financial Crises

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Market Economies

The ISLM Model

Filters

Everything else held constant,a stronger dollar benefits and hurts .

From 1980 to early 1985 the dollar in value,thereby benefiting American .