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

________ markets transfer funds from people who have an excess of available funds to people who have a shortage.

A budget ________ occurs when government expenditures exceed tax revenues for a particular time period.

The bond markets are important because they are

An increase in interest rates might ________ saving because more can be earned in interest income.

High interest rates might cause a corporation to ________ building a new plant that would provide more jobs.

The management of money and interest rates is called ________ policy and is conducted by a nation's ________ bank.

Poorly performing financial markets can be the cause of

Between 1950 and 1980 in the U.S.,interest rates trended upward.During this same time period,

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

Prior to all recessions since 1900,there has been a drop in

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

To calculate the growth rate of a variable,you will

Everything else constant,a stronger dollar will mean that

Evidence from business cycle fluctuations in the United States indicates that

The gross domestic product is the

If the CPI in 2004 is 200,and in 2005 the CPI is 180,the rate of inflation from 2004 to 2005 is

A financial crisis is

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

When tax revenues are greater than government expenditures,the government has a budget ________.

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