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Financial Economics Quiz 1 (30 MCQs)

Quiz Instructions

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1. The aim of quantitative easing is to increase economic activity by
2. It is common to distinguish three motives for holding money:the transactions motive, the precautionary motive, and the speculative motive. The principal determinant of the size of transaction balances is:
3. ..... refers to how quickly and with what risks an asset can be converted into money.
4. A central bank pursues a policy of quantitative easing by purchasing government securities.What is likely to happen to interest rates and aggregate expenditure?
5. Currency circulation is part of
6. Reach and Sustainability are the primary goals of microfinance.
7. What is the key term for when a country or NGO donates resources to another country to help it develop.
8. Irrational exuberance about the future of the economy would lead to
9. The ability to express the value of goods and services in different amounts of a currency is money's function as .....
10. Gold is no longer used as money in modern societies. One of the reasons is that it is not .....
11. Refers to the expenditure for the purchase of making of new capital goods including inventories.
12. Murabaha is a type of Islamic financing that involves the sharing of profits and losses between the bank and the borrower.
13. If the stock market sees increases in all sectors the ..... of loanable funds will ..... because of the ..... effect.
14. Gharar is a must in Islamic Finance
15. Sukuk and bond conventional, both provide investors with payment streams
16. Which of the following is not a function of money?
17. If banks within a country's banking system generally have more money to lend out, we say that the supply of loanable funds increases (in other words, the supply curve shifts right). When this happens we would expect this to:
18. Broad money consists of ..... plus savings accounts and money market accounts.
19. Quantitative easing is a form of
20. If UK citizens become less concerned with the future and save less at each real interest rate,
21. Relationship between interest rate and speculative demand for money is called .....
22. A financial intermediary is a middleperson between
23. Quantitative easing is also seen as a solution to deflation. Quantitative easing can help increase inflation closer to the
24. Which graph has the real interest rate on the y axis?
25. As all the other prices are determine in different markets, the equilibrium rate of interest is also determined by the forces of supply and demand in the financial markets.
26. An increase in disposable income would lead to
27. What factor is being described as below? If there is a high rate of inflation predicted, consumers will begin to withdraw their money from the banks to liquefy their assets and spend it on goods and services before prices rise=> Decrease the number of loanable funds
28. Shariah arbitrage is a risk-free investment strategy that guarantees high returns
29. What are the key principles of takaful insurance?1. Mutual CooperationII.Certainty (Gharar)Ill. Shariah ComplianceIV. Speculation (Maysir)V.Risk Sharing
30. What is Takaful?
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