Reference no: EM132608771

Question 1: The role of money as a store of value refers to the

Select one:

a. fact that money never loses its value compared with other assets.

b. fact that money allows worth to be stored readily.

c. value of money falling only when the money supply increases.

d. value of money falling only when the money supply falls.

Question 2: The process of facilitating the flow of funds between borrowers and lenders performed by the financial system

Select one:

a. is hindered by the problem of 'double coincidence of wants'.

b. increases the rate of economic growth of a country.

c. occurs only through financial intermediaries.

d. greatly reduces the probability of inflation.

Question 3: Financial intermediaries pool the funds of:

Select one:

a. a few large savers and make loans to a few large borrowers.

b. a few savers and make loans to many borrowers.

c. many small savers and make loans to many borrowers.

d. many small savers and make loans to a few large borrowers.

Question 4: A 'primary market' is a market

Select one:

a. where government securities are bought and sold.

b. only for equity issues by major or 'primary' companies.

c. where borrowers sell new financial instruments to buyers.

d. where savers sell new financial claims to borrowers.

Question 5: A savings-surplus unit is an entity:

Select one:

a. that needs to borrow funds from a surplus unit.

b. whose spending exceeds its income.

c. called a company.

d. which has an income that exceeds its spending.