Financial Market

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The exchange of goods and services is made more efficient by: A. barters. B. money. C. governments. D. some combination of government transfer and barter. Short selling is: A. the sale of a financial product at a discount to its current market value. B. the sale of a financial product in small quantities. C. the sale of a financial product that the seller does not own. D. the sale of a financial product where the seller agrees to buy it back at a predetermined price. The term ‘medium of exchange' for money refers to its use as: A. coinage. B. currency. C. something that is widely accepted as payment for goods and services. D. any standard of value that prices can be expressed in. The role of money as a store of value refers to: A. the value of money falling only when the money supply falls. B. the value of money falling only when the money supply increases. C. the fact that money allows worth to be stored readily. D. the fact that money never loses its value compared with other assets. Money increases economic growth by assisting transfers from: A. consumers to investors. B. savers to borrowers. C. businesses to consumers. D. borrowers to investors. Financial markets have developed to facilitate the exchange of money between savers and borrowers. Which of the following is NOT a function of money? A. A store of value B. A medium of exchange for settling economic transactions C. A claim to future cash flows D. Short-term protection against inflation Buyers of financial claims lend their excess funds because they: A. expect to borrow extra funds in the future. B. want surplus funds in the future. C. want to invest in the future. D. want to increase their costs relative to their incomes. Sellers of financial claims promise to pay back borrowed funds: A. by borrowing extra…...

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