WorksheetsQuantity Theory of Money and Financial Markets
Total questions: 50
Worksheet time: 25mins
According to the quantity theory of money, the value of money is determined by the supply of money, the rate at which money circulates, and:
The level of taxation
The quantity of goods and services available
The foreign exchange rate
The population size
The equation for the quantity theory of money is:
M + V = P + T
MV = PT
M/V = P/T
MP = VT
In the equation MV = PT, 'M' stands for:
Market demand
Supply of money
Marginal utility
Monetary policy
In the equation MV = PT, 'V' stands for:
Value of money
Velocity of circulation of money
Volume of trade
Variable costs
In the equation MV = PT, 'P' stands for:
Production level
Purchasing power
Price level
Profit margin
In the equation MV = PT, 'T' stands for:
Total supply
Transaction demand
Taxation rate
Quantity of goods (or transactions)
If M=100, V=5, and T=250, what is P according to the quantity theory of money?
1
2
5
10
The 'rate at which money circulates' is also known as its:
Density
Velocity
Liquidity
Scarcity
The quantity theory suggests a direct relationship between the money supply and:
The value of money
The price level
The interest rate
The volume of goods
If the quantity of money (M) increases, and V and T remain constant, then:
P will decrease
P will increase
P will remain constant
V will decrease
The money market is a financial market for trading in:
Long-term financial assets
Short-term financial assets
Real estate
Commodities like gold and oil
The money market facilitates:
Long-term loans and investment
Short-term loans and investment
The sale of company shares only
Government infrastructure projects
Which of these financial institutions operates primarily in the money market?
Development Bank
Stock Exchange
Commercial Bank
Mortgage Bank
Which of the following is NOT listed as a financial institution operating in the money market?
Central Bank
Acceptance House
Insurance Companies
Discount houses
An instrument used in the money market is:
Shares
Government bonds
Treasury Bills
Development stocks
Which of the following is NOT an instrument of the money market?
Treasury Bills
A bill of exchange
Company bonds
Treasury certificate
A function of the money market is:
Provision of capital for permanent long-term investments
Offering investment opportunities on a short-term basis
Facilitating the sale of company ownership
Funding large scale industrial projects only
Mobilization of savings for short-term investment is a key role of the:
Capital market
Stock exchange
Money market
Foreign exchange market
The money market provides circulating capital for:
Government long-term projects
Commerce and industry
Individual housing loans
International development aid
The capital market is a financial market for trading in:
Short-term financial assets
Long-term financial assets
Foreign currencies
Commercial papers
The capital market is divided into:
Domestic and international markets
Primary market and secondary market
Debt market and equity market
Spot market and futures market
The primary market deals with:
The buying and selling of old securities
The buying and selling of new securities
Short-term government debt
Foreign exchange transactions
The primary market is dominated by:
Commercial banks
Merchant banks
Discount houses
The Central Bank
The secondary market deals with:
The buying and selling of new securities
The buying and selling of old (second-hand) securities
The issuance of treasury bills
Short-term inter-bank lending
The secondary market is dominated by:
Merchant banks
The stock exchange
Acceptance houses
Finance companies
Which institution primarily operates in the capital market?
Discount House
Insurance companies
Hire-purchase companies
Commercial banks (for short-term focus)
Which of the following is an instrument used in the capital market?
Treasury Bills
Bill of exchange
Shares
Treasury certificate
Development stocks and Government bonds are instruments of the:
Money market
Capital market
Foreign exchange market
Commodity market
A key function of the capital market is the provision of:
Short-term working capital
Capital for permanent long-term investments
Liquidity for daily transactions
Emergency funds for individuals
The capital market encourages the growth of:
Discount houses
Merchant banking
Hire purchase companies
Microfinance banks
Which of the following is NOT a financial institution listed as operating in the capital market?
Development banks
Insurance companies
Discount Houses
Mortgage banks
'Invet' (likely a typo for Investment Banks) is listed as an institution in the:
Money Market
Capital Market
Commodity Market
Foreign Exchange Market
The Second-Tier Securities Market was established in:
1960
April 1985
2000
1990
The Second-Tier Securities Market aims to encourage ______ to access stock market resources.
Large multinational corporations
Small and medium-scale enterprises
Government agencies only
Foreign investors exclusively
Listing requirements for the Second-Tier Securities Market are generally ______ for small/medium enterprises.
More stringent
Less stringent
The same as the main market
Non-existent
The aim of the Second-Tier Securities Market is to increase the:
Interest rates
Volume of security in the market
Number of commercial banks
Supply of money
The stock exchange market deals with the buying and selling of:
Short-term financial assets
Long-term financial assets (securities) like stock and shares
Physical commodities
Foreign currencies
The Nigerian Stock Exchange was formerly known as:
The Abuja Stock Exchange
The West African Stock Exchange
The Lagos Stock Exchange
The National Securities Exchange
The Nigerian Stock Exchange was established in:
1950
1960
1970
1985
The two main dealers on the stock exchange are:
Buyers and Sellers
Banks and Insurance Companies
Stock Brokers and Jobbers
Investors and Speculators
Who deals directly with the public, acting as their agents in the stock exchange?
Jobbers
Stock Brokers
Underwriters
Issuing houses
The commission charged by stock brokers for their services is called:
Jobber's turn
Interest
Brokerage
Dividend
The main dealer at the stock exchange who does not deal directly with the public is the:
Stock Broker
Jobber
Merchant Bank
Financial Advisor
A jobber quotes two prices: a high price for selling and a lower price for:
Lending
Borrowing
Buying
Holding
The jobber's profit is known as:
Brokerage
Commission
The jobber's turn
Spread
The 'jobber's turn' is the difference between his:
Quoted price and actual transaction price
Selling and buying price
Commission earned and expenses
Short-term and long-term investment returns
Which of the following is a function of the stock exchange?
Setting interest rates
Raising of long-term capital investment
Printing currency
Regulating commercial banks
The stock exchange acts as a barometer for measuring:
The inflation rate
The economic performance
The unemployment rate
The government's budget deficit
Protecting the public against ______ is a function of the stock exchange.
Inflation
Deflation
Fraud
High taxation
Stabilization of prices of ______ is a function of the stock exchange.
Consumer goods
Securities
Foreign currencies
Raw materials
