Question 1

A weaker dollar benefits ________ and hurts ________

Accepted Answer

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

Question 2

If you are planning a vacation to Europe, do you prefer a strong dollar or weak dollar relative to the euro? Why?

Accepted Answer

not answered

Question 3

Changes in stock prices

Accepted Answer

A) affect people's wealth and their willingness to spend. 
B) affect firms' decisions to sell stock to finance investment spending. 
C) are characterized by considerable fluctuations. 
D) all of the above. 
E) only A and B of the above. 
A) affect people's wealth and their willingness to spend. 
B) affect firms' decisions to sell stock to finance investment spending. 
C) are characterized by considerable fluctuations. 
D) all of the above. 
E) only A and B of the above. D

Question 4

Economists group commercial banks, savings and loan associations, credit unions, mutual funds, mutual savings banks, insurance companies, pension funds, and finance companies together under the heading financial intermediaries. Financial intermediaries

Accepted Answer

A) act as middlemen, borrowing funds from those who have saved and lending these funds to others. 
B) play an important role in determining the quantity of money in the economy. 
C) help promote a more efficient and dynamic economy. 
D) do all of the above. 
E) do only A and C of the above. 
A) act as middlemen, borrowing funds from those who have saved and lending these funds to others. 
B) play an important role in determining the quantity of money in the economy. 
C) help promote a more efficient and dynamic economy. 
D) do all of the above. 
E) do only A and C of the above.

Question 5

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) funds markets. 
C) derivative exchange markets. 
D) financial markets. 
A) commodity markets. 
B) funds markets. 
C) derivative exchange markets. 
D) financial markets.

Question 6

Financial innovation has provided more options to both investors and borrowers.

Accepted Answer

A) True 
 B)False

Question 7

How does a bond differ from a stock?

Accepted Answer

A bond and a stock represent two differe

Question 8

What is the central bank and what does it do?

Accepted Answer

The answer of What is the central bank and what...

Question 9

In recent years

Accepted Answer

A) interest rates have remained constant. 
B) the success of financial institutions has reached levels unprecedented since the Great Depression. 
C) stock markets have crashed. 
D) all of the above. 
A) interest rates have remained constant. 
B) the success of financial institutions has reached levels unprecedented since the Great Depression. 
C) stock markets have crashed. 
D) all of the above.

Question 10

Financial institutions are among the largest employers in the country and frequently pay very high salaries.

Accepted Answer

A) True 
 B)False

Question 11

How does the value of the dollar affect the competitiveness of American businesses?

Accepted Answer

The answer of How does the value of the dollar...

Question 12

________ are an example of a financial institution.

Accepted Answer

A) Banks 
B) Insurance companies 
C) Finance companies 
D) All of the above 
A) Banks 
B) Insurance companies 
C) Finance companies 
D) All of the above

Question 13

What are financial intermediaries and what do they do?

Accepted Answer

The answer of What are financial intermediaries and what do...

Question 14

The bond markets are important because

Accepted Answer

A) they are easily the most widely followed financial markets in the United States. 
B) they are the markets where interest rates are determined. 
C) they are the markets where foreign exchange rates are determined. 
D) all of the above. 
A) they are easily the most widely followed financial markets in the United States. 
B) they are the markets where interest rates are determined. 
C) they are the markets where foreign exchange rates are determined. 
D) all of the above.

Question 15

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 16

Stock prices since the 1980s have been

Accepted Answer

A) relatively stable, trending upward at a steady pace. 
B) relatively stable, trending downward at a moderate rate. 
C) extremely volatile. 
D) unstable, trending downward at a moderate rate. 
A) relatively stable, trending upward at a steady pace. 
B) relatively stable, trending downward at a moderate rate. 
C) extremely volatile. 
D) unstable, trending downward at a moderate rate.

Question 17

Holding everything else constant, as the dollar strengthens foreigners will buy more U.S. exports.

Accepted Answer

A) True 
 B)False

Question 18

Money is defined as

Accepted Answer

A) anything that is generally accepted in payment for goods and services or in the repayment of debt. 
B) bills of exchange. 
C) a riskless repository of spending power. 
D) all of the above. 
E) only A and B of the above. 
A) anything that is generally accepted in payment for goods and services or in the repayment of debt. 
B) bills of exchange. 
C) a riskless repository of spending power. 
D) all of the above. 
E) only A and B of the above.

Question 19

(I)Banks are financial intermediaries that accept deposits and make loans. (II)The term "banks" includes firms such as commercial banks, savings and loan associations, mutual savings banks, credit unions, insurance companies, and pension funds.

Accepted Answer

A) (I)is true, (II)false. 
B) (I)is false, (II)true. 
C) Both are true. 
D) Both are false. 
A) (I)is true, (II)false. 
B) (I)is false, (II)true. 
C) Both are true. 
D) Both are false.

Question 20

The largest financial intermediaries are

Accepted Answer

A) insurance companies. 
B) finance companies. 
C) banks. 
D) all of the above. 
A) insurance companies. 
B) finance companies. 
C) banks. 
D) all of the above.

Exam 1: Why Study Financial Markets and Institutions

A weaker dollar benefits ________ and hurts ________

If you are planning a vacation to Europe, do you prefer a strong dollar or weak dollar relative to the euro? Why?

Changes in stock prices

Economists group commercial banks, savings and loan associations, credit unions, mutual funds, mutual savings banks, insurance companies, pension funds, and finance companies together under the heading financial intermediaries. Financial intermediaries

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

Financial innovation has provided more options to both investors and borrowers.

How does a bond differ from a stock?

What is the central bank and what does it do?

In recent years

Financial institutions are among the largest employers in the country and frequently pay very high salaries.

How does the value of the dollar affect the competitiveness of American businesses?

________ are an example of a financial institution.

What are financial intermediaries and what do they do?

The bond markets are important because

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

Stock prices since the 1980s have been

Holding everything else constant, as the dollar strengthens foreigners will buy more U.S. exports.

Money is defined as

(I)Banks are financial intermediaries that accept deposits and make loans. (II)The term "banks" includes firms such as commercial banks, savings and loan associations, mutual savings banks, credit unions, insurance companies, and pension funds.

The largest financial intermediaries are

Overview of the Financial System

What Do Interest Rates Mean and What Is Their Role in Valuation

Why Do Interest Rates Change

How Do Risk and Term Structure Affect Interest Rates

Are Financial Markets Efficient

Why Do Financial Institutions Exist

Why Do Financial Crises Occur and Why Are They so Damaging to the Economy

Central Banks and the Federal Reserve System

Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics

The Money Markets

The Bond Market

The Stock Market

The Mortgage Markets

The Foreign Exchange Market

The International Financial System

Banking and the Management of Financial Institutions

Financial Regulation

Banking Industry: Structure and Competition

The Mutual Fund Industry

Insurance Companies and Pension Funds

Investment Banks, Security Brokers and Dealers, and Venture Capital Firms

Risk Management in Financial Institutions

Hedging With Financial Derivatives

Savings Associations and Credit Unions

Finance Companies

Filters

A weaker dollar benefits and hurts

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