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Financial Economics Quiz 2 (30 MCQs)

Quiz Instructions

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1. High reserve requirements
2. Financial institutions are less likely to develop new and innovative financial products when there is an increased demand for Sharia-compliant financial products
3. ..... is also called narrow money.
4. Liquidity also known as .....
5. If government spending exceeds tax collections,
6. What are the two key functions of a central bank?
7. Bitcoin may not be considered good money because it is not
8. In takaful insurance, the concept of mutual cooperation plays a central role. Participants come together and pool their resources to provide financial protection and support to one another. They contribute to a common takaful fund based on the principles of solidarity and shared responsibility. This fund is utilized to compensate any participant who suffers a loss or damage
9. The process by which banks increase the money supply is known as money creation. The amount by which the money supply can increase depends on their liquidity ratio. If the bank decides to hold a lower liquidity ratio the bank multiplier will .....
10. In regulatory arbitrage, a special purpose vehicle may be created by a conventional bank
11. 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?
12. The ability to produce value and then acquire goods and services at a later date is money's function as .....
13. What is the IMF?
14. 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?
15. The provision of small-scale loans to the poor for example by credit unions
16. The aim of quantitative easing is to:
17. Three-country trade agreement negotiated by the governments of Canada, Mexico, and the United States
18. 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?
19. A major technological break through would lead to
20. Acting as a Government's bank means
21. 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?
22. When money is not used and goods and services are exchanged for other goods and services, this system is called:
23. Quantitative Easing:Increasing the money supply and using these electronically created funds to buy government bonds or other securities.
24. Islamic finance is a prohibitions-driven industry
25. The loanable funds theory of interest rate determination makes certain important modifications in the classical theory.
26. The slope of the demand for loanable funds curve represents the
27. If a large segment of the population expects their income to fall in the future
28. What is the key term for small scale financial support from banks to help the poor to set up small scale businesses?
29. A 'run on the bank' occurs when
30. How many countries are a part of the World Bank?
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