Question 1

From 1980-1985,the dollar strengthened in value against other currencies.Who was helped and who was hurt by this strong dollar?

Accepted Answer

American consumers benefitted because im

Question 2

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 3

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 4

________ policy involves decisions about government spending and taxation.

Accepted Answer

A) Monetary 
B) Fiscal 
C) Financial 
D) Systemic 
A) Monetary 
B) Fiscal 
C) Financial 
D) Systemic

Question 5

Budgets deficits can be a concern because they might

Accepted Answer

A) ultimately lead to higher inflation. 
B) lead to lower interest rates. 
C) lead to a slower rate of money growth. 
D) lead to higher bond prices. 
A) ultimately lead to higher inflation. 
B) lead to lower interest rates. 
C) lead to a slower rate of money growth. 
D) lead to higher bond prices.

Question 6

American farmers who sell beef to Europe benefit most from

Accepted Answer

A) a decrease in the dollar price of euros. 
B) an increase in the dollar price of euros. 
C) a constant dollar price for euros. 
D) a European ban on imports of American beef. 
A) a decrease in the dollar price of euros. 
B) an increase in the dollar price of euros. 
C) a constant dollar price for euros. 
D) a European ban on imports of American beef.

Question 7

Sustained downward movements in the business cycle are referred to as

Accepted Answer

A) inflation. 
B) recessions. 
C) economic recoveries. 
D) expansions. 
A) inflation. 
B) recessions. 
C) economic recoveries. 
D) expansions.

Question 8

Which of the following is a true statement?

Accepted Answer

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. 
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.

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

Compared to interest rates on long-term U.S.government bonds,interest rates on three-month Treasury bills fluctuate ________ and are ________ on average.

Accepted Answer

A) more; lower 
B) less; lower 
C) more; higher 
D) less; higher 
A) more; lower 
B) less; lower 
C) more; higher 
D) less; higher

Question 11

The delivery of financial services electronically is called ________.

Accepted Answer

A) e-business 
B) e-commerce 
C) e-finance 
D) e-possible 
A) e-business 
B) e-commerce 
C) e-finance 
D) e-possible

Question 12

Which of the following is not a financial institution?

Accepted Answer

A) a life insurance company 
B) a pension fund 
C) a credit union 
D) a business college 
A) a life insurance company 
B) a pension fund 
C) a credit union 
D) a business college

Question 13

What is a stock? How do stocks affect the economy?

Accepted Answer

A stock represents a share of ownership

Question 14

Financial markets promote economic efficiency by

Accepted Answer

A) channeling funds from investors to savers. 
B) creating inflation. 
C) channeling funds from savers to investors. 
D) reducing investment. 
A) channeling funds from investors to savers. 
B) creating inflation. 
C) channeling funds from savers to investors. 
D) reducing investment.

Question 15

If the price level increases from 200 in year 1 to 220 in year 2,the rate of inflation from year 1 to year 2 is

Accepted Answer

A) 20%. 
B) 10%. 
C) 11%. 
D) 120%. 
A) 20%. 
B) 10%. 
C) 11%. 
D) 120%.

Question 16

During a recession,output declines resulting in

Accepted Answer

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. 
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.

Question 17

Low stock market prices might ________ consumers willingness to spend and might ________ businesses willingness to undertake investment projects.

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; decrease 
D) decrease; increase 
A) increase; increase 
B) increase; decrease 
C) decrease; decrease 
D) decrease; increase

Question 18

A key factor in producing high economic growth is

Accepted Answer

A) eliminating foreign trade. 
B) well-functioning financial markets. 
C) high interest rates. 
D) stock market volatility. 
A) eliminating foreign trade. 
B) well-functioning financial markets. 
C) high interest rates. 
D) stock market volatility.

Question 19

A sharp increase in the growth of the money supply is likely followed by

Accepted Answer

A) a recession. 
B) a depression. 
C) an increase in the inflation rate. 
D) no change in the economy. 
A) a recession. 
B) a depression. 
C) an increase in the inflation rate. 
D) no change in the economy.

Question 20

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

Accepted Answer

A) discourage; encourage 
B) discourage; discourage 
C) encourage; encourage 
D) encourage; discourage 
A) discourage; encourage 
B) discourage; discourage 
C) encourage; encourage 
D) encourage; discourage

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

From 1980-1985,the dollar strengthened in value against other currencies.Who was helped and who was hurt by this strong dollar?

The most comprehensive measure of aggregate output is

Changes in stock prices

________ policy involves decisions about government spending and taxation.

Budgets deficits can be a concern because they might

American farmers who sell beef to Europe benefit most from

Sustained downward movements in the business cycle are referred to as

Which of the following is a true statement?

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

Compared to interest rates on long-term U.S.government bonds,interest rates on three-month Treasury bills fluctuate ________ and are ________ on average.

The delivery of financial services electronically is called ________.

Which of the following is not a financial institution?

What is a stock? How do stocks affect the economy?

Financial markets promote economic efficiency by

If the price level increases from 200 in year 1 to 220 in year 2,the rate of inflation from year 1 to year 2 is

During a recession,output declines resulting in

Low stock market prices might ________ consumers willingness to spend and might ________ businesses willingness to undertake investment projects.

A key factor in producing high economic growth is

A sharp increase in the growth of the money supply is likely followed by

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

An Overview of the Financial System

What Is Money

Understanding 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

Financial Crises and the Subprime Meltdown

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Central Banks and the Federal Reserve System

The Money Supply Process

Tools for Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

The Demand for Money

The Islm Model

Monetary and Fiscal Policy in the ISLM Model

Aggregate Demand and Supply Analysis

Transmission Mechanisms of Monetary Policy: The Evidence

Money and Inflation

Rational Expectations: Implications for Policy

Filters

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

Compared to interest rates on long-term U.S.government bonds,interest rates on three-month Treasury bills fluctuate and are on average.

Low stock market prices might consumers willingness to spend and might businesses willingness to undertake investment projects.

High interest rates might purchasing a house or car but at the same time high interest rates might saving.