This quiz works best with JavaScript enabled. Home > Economics > Financial Economics > Financial Economics – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Economics Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. To maintain financial stability a central bank may have to provide emergency funds, though at a price, to protect depositors and in extreme cases to prevent a systemic crisis in the financial system.What the term used to describe this? A) Lender of first resort. B) Lender of penultimate resort. C) Lender of last resort. D) Lender of past resort. Show Answer Correct Answer: C) Lender of last resort. 2. The ability to produce value and then acquire goods and services at a later date is money's function as ..... A) A medium of exchange. B) A unit of account. C) A store of value. D) None of above. Show Answer Correct Answer: C) A store of value. 3. What is the IMF? A) International Monetary Fund. B) Intelligent Monkey Foundation. C) International Military Foundation. D) None of above. Show Answer Correct Answer: A) International Monetary Fund. 4. What is sukuk? A) A type of Islamic charity that involves giving to the poor and needy. B) A type of Islamic financing that involves the sale of goods at a markup. C) A type of Islamic banking that involves profit and loss sharing. D) A type of Islamic bond that represents ownership in an underlying asset. Show Answer Correct Answer: D) A type of Islamic bond that represents ownership in an underlying asset. 5. Assume that businesses feel pessimistic about the future and therefore do not want to buy as much real capital (machines to help production) as before. To buy machines, businesses borrow money from banks. Because they don't want the machines, they do not want to borrow as much money as before. How would this affect the loanable funds market? A) Demand for loanable funds increases. B) Demand for loanable funds decreases. C) There is no change to demand for loanable funds. D) None of above. Show Answer Correct Answer: B) Demand for loanable funds decreases. 6. The provision of small-scale loans to the poor for example by credit unions A) Microfinancing. B) Micro-credit. C) Micro-savings. D) Micro-insurance. E) Remittance management. Show Answer Correct Answer: B) Micro-credit. 7. The aim of quantitative easing is to: A) Increase bank lending leading to higher investment. This should stimulate economic growth. B) Decrease bank lending leading to higher investment. This should stimulate economic growth. C) Increase bank lending leading to higher investment. This should decrease Unemployment rate. D) Decrease bank lending leading to higher investment. This should stimulate more employment. Show Answer Correct Answer: A) Increase bank lending leading to higher investment. This should stimulate economic growth. 8. Three-country trade agreement negotiated by the governments of Canada, Mexico, and the United States A) The UN. B) NAFTA. C) NATO. D) IMF. Show Answer Correct Answer: B) NAFTA. 9. Macroprudential regulation focuses not on a single financial institution but on the financial system as whole, and which monitors its impact on the wider economy. Is this statement true or false? A) True. B) False. Show Answer Correct Answer: A) True. 10. A major technological break through would lead to A) An increase in DLF. B) A decrease in DLF. C) An increase in SLF. D) A decrease in SLF. Show Answer Correct Answer: A) An increase in DLF. 11. Acting as a Government's bank means A) All the government departments have an account at the Central Bank. B) All the members of parliament have an account at the Central Bank. C) Prime Minister has an account tat Central Bank. D) None of the Above. Show Answer Correct Answer: A) All the government departments have an account at the Central Bank. 12. The amount of banknotes issued by the Bank of England depends largely on the demand for notes from the general public. Is this statement true or false? A) True. B) False. Show Answer Correct Answer: A) True. 13. When money is not used and goods and services are exchanged for other goods and services, this system is called: A) Credit. B) Money. C) Barter. D) Checks. Show Answer Correct Answer: C) Barter. 14. Quantitative Easing:Increasing the money supply and using these electronically created funds to buy government bonds or other securities. A) Done by Central Bank. B) Done by commercial Bank. C) Done by Investment bank. D) None of the above. Show Answer Correct Answer: A) Done by Central Bank. 15. Islamic finance is a prohibitions-driven industry A) True. B) False. Show Answer Correct Answer: A) True. 16. The loanable funds theory of interest rate determination makes certain important modifications in the classical theory. A) True. B) False. Show Answer Correct Answer: A) True. 17. The slope of the demand for loanable funds curve represents the A) Positive relation between the real interest rate and investment. B) Negative relation between the real interest rate and investment. C) Positive relation between the real interest rate and saving. D) Negative relation between the real interest rate and saving. Show Answer Correct Answer: B) Negative relation between the real interest rate and investment. 18. If a large segment of the population expects their income to fall in the future A) An increase in DLF. B) A decrease in DLF. C) An increase in SLF. D) A decrease in SLF. Show Answer Correct Answer: C) An increase in SLF. 19. What is the key term for small scale financial support from banks to help the poor to set up small scale businesses? A) Aid. B) Debt relief. C) Tariffs. D) Microfinance. Show Answer Correct Answer: D) Microfinance. 20. A 'run on the bank' occurs when A) Depositors want to withdraw more money than can be paid out. B) The value of a bank's assets in loans and securities plummet. C) The Central Bank implements a reserve requirement. D) None of above. Show Answer Correct Answer: A) Depositors want to withdraw more money than can be paid out. ← PreviousNext →Related QuizzesEconomics QuizzesFinancial Economics Quiz 1Financial Economics Quiz 2Financial Economics Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books