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ECON302 Final Exam - Money, Banking, And Financial Markets
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MCQs on the importance of money, banking, and financial markets of a developed economy.

ECON302 Final Exam - Money, Banking, And Financial Markets
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25 Questions

1. You win a lottery which promises to pay you $1,000.00 over five years in equal installments.The interest rate is 5%.The amount you won is actually closest to what amount?
2. Complete the following statement.The present discounted value of a stream of cash payments will always be:
3. What are Eurodollars?
4. What is meant by interest rate targeting in the conduct of monetary policy?
5. Which of the following reasons accurately explains why governments regulate banks?
6. To achieve the mandate of full employment, the Federal Reserve Bank could do which of the following?
7. In an effort to minimize bank failures through deposits insurance, regulators may increase which of the following?
8. First All Bank is a financial intermediary.This means that First All Bank does which of the following?
9. Complete the following statement.Money market instruments have maturities of:
10. Fill in the blanks.Financial markets foster economic growth by facilitating the transfer of funds from ______ to ______.
11. Joan borrows $100.00 from her sister with the promise to repay at the end of the month.Her sister goes to the bank to withdraw $100.00 from her bank account to give it to her.This is an instance of which of the following?
12. Complete the following statement.Banks are regulated because governments want them to:
13. Why is indirect finance more important than direct finance in the U.S. economy?
14. When an individual takes out a loan from a bank to buy a car, the individual issues which of the following?
15. Fill in the blanks.Financial intermediaries are efficient at moving funds from savers to borrowers, because they ______ by ______.
16. Which of the following is a main reason for the dominance of financial intermediaries in the economy?
17. What is the Federal Funds rate?
18. A debt instrument can be issued by which of the following?
19. How do financial markets promote economic development?
20. How do financial markets promote economic efficiency?
21. Corporate bonds are issued by which of the following?
22. Without financial intermediaries, why would small savers not benefit from financial markets?
23. Why would a modern economy not operate efficiently without money?
24. Complete the following statement.Asymmetric information reduces financial transactions, because:
25. A commercial paper with a ten year maturity pays an annual interest rate of 7%, while a U.S. government bond with the same maturity pays 5%.What could account for the difference?