WorksheetsChap 1 KTTTNH
Total questions: 10
Worksheet time: 4mins
Name
Class
Date
1.
Financial markets have the basic function of
a)
getting people with funds to lend together with people who want to borrow funds.
b)
assuring that the swings in the business cycle are less pronounced.
c)
assuring that governments need never resort to printing money.
d)
providing a risk-free repository of spending power.
2.
Which of the following can be described as involving direct finance?
a)
People buy shares in a mutual fund.
b)
A pension fund manager buys a short-term corporate security in the secondary market.
c)
A corporation issues new shares of stock.
d)
An insurance company buys shares of common stock in the over-the-counter markets
3.
Equity holders are a corporation's ________. That means the corporation must pay all of its debt holders before it pays its equity holders.
a)
debtors
b)
brokers
c)
underwriters
d)
residual claimants
4.
Which of the following instruments are traded in a money market?
a)
state and local government bonds
b)
U.S. Treasury bills
c)
corporate bonds
d)
U.S. government agency securities
5.
Economies of scale enable financial institutions to
a)
reduce transactions costs.
b)
avoid the asymmetric information problem.
c)
avoid adverse selection problems.
d)
reduce moral hazard.
6.
Which of the following financial intermediaries is NOT a depository institution?
a)
a savings and loan association
b)
a commercial bank
c)
a credit union
d)
a finance company
7.
Money is
a)
a flow of earnings per unit of time.
b)
anything that is generally accepted in payment for goods and services or in the repayment of debt.
c)
the total collection of pieces of property that are a store of value.
d)
always based on a precious metal like gold or silver.
8.
If there are four goods in a barter economy, then one needs to know ________ prices in order to exchange one good for another.
a)
4
b)
5
c)
6
d)
8
9.
________ is the narrowest monetary aggregate that the Fed reports
a)
M0
b)
M1
c)
M2
d)
M3
10.
Kevin purchasing concert tickets with his debit card is an example of the ________ function of money.
a)
medium of exchange
b)
unit of account
c)
store of value
d)
specialization
100 %
