Download Financial Markets: Efficiency, Functions, and Impact and more Schemes and Mind Maps Economics in PDF only on Docsity! CHAPTER: FINANCIAL MARKETS 1) Financial markets promote economic efficiency by -------------------------------------------------------------------------------------------------------- ------------ 2) Financial markets promote greater economic efficiency by channeling funds from ________ to ________. -------------------------------------------------------------------------------------------------------- ------------- 3) Well-functioning financial markets promote -------------------------------------------------------------------------------------------------------- ------------- 4) A key factor in producing high economic growth is -------------------------------------------------------------------------------------------------------- ------------- 5) Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called -------------------------------------------------------------------------------------------------------- ------------- 6) ________ markets transfer funds from people who have an excess of available funds to people who have a shortage. -------------------------------------------------------------------------------------------------------- ------------- 7) Poorly performing financial markets can be the cause of -------------------------------------------------------------------------------------------------------- ------------- 8) The bond markets are important because they are -------------------------------------------------------------------------------------------------------- ------------- 9) The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100 per year) is commonly referred to as the -------------------------------------------------------------------------------------------------------- ------------- 10) Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury bills fluctuate ________ and are ________ on average. -------------------------------------------------------------------------------------------------------- ------------- 11) Everything else held constant, a decline in interest rates will cause spending on housing to -------------------------------------------------------------------------------------------------------- ------------- 12) High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving. -------------------------------------------------------------------------------------------------------- ------------- 13) An increase in interest rates might ________ saving because more can be earned in interest income. -------------------------------------------------------------------------------------------------------- ------------- 14) Everything else held constant, an increase in interest rates on student loans -------------------------------------------------------------------------------------------------------- ------------- 15) High interest rates might cause a corporation to ________ building a new plant that would provide more jobs. -------------------------------------------------------------------------------------------------------- ------------- 16) The stock market is important because it is -------------------------------------------------------------------------------------------------------- ------------- 17) Stock prices are -------------------------------------------------------------------------------------------------------- ------------- 18) A rising stock market index due to higher share prices
