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Financial System Workshop Questions

This document provides a multiple choice quiz on the financial system. It contains 8 multiple choice questions covering topics such as participants in financial markets, the roles of financial markets and institutions, characteristics of money, factors for judging the quality of a financial center, and comparisons between monetary and barter economies. It also includes an essay question asking to discuss the role of money in evolving from a barter economy to an advanced economy with a financial system.

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175 views2 pages

Financial System Workshop Questions

This document provides a multiple choice quiz on the financial system. It contains 8 multiple choice questions covering topics such as participants in financial markets, the roles of financial markets and institutions, characteristics of money, factors for judging the quality of a financial center, and comparisons between monetary and barter economies. It also includes an essay question asking to discuss the role of money in evolving from a barter economy to an advanced economy with a financial system.

Uploaded by

patrick
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Workshop 1

Related topics: The Financial System

Multiple choice questions:


Attempt all questions before the workshop, open book. Your tutor will give the answers and lead
the discussions in the workshops.

1. Which of the following are not main participants in financial market transactions?

(a) households
(b) financial institutions
(c) governments
(d) all of the above are main participants in financial market transactions

2. Financial markets

(a) facilitate the flow of funds from deficit to surplus units.


(b) facilitate the flow of funds from surplus to deficit units.
(c) are markets in which financial assets such as stocks and bonds can be bought and sold.
(d) only answers b and c are correct.

3. What is the main difficulty with barter economy?

(a) A household cannot consume more than what it earns.


(b) The mis-match of desired quantity between buyers and sellers
(c) Money does not exist
(d) Double coincidence of wants

4. What is (are) the primary role(s) of financial system?

(a) An intermediary between the surplus agents and deficits agents


(b) Transforming low risk claims to high risk claims
(c) Transforming short-term claims to long-term claims
(d) All of the above

5. What is not an ideal characteristic for a good that can be used as money?

(a) Homogeneity of quality.


(b) Easy to carry.
(c) Relatively scarce.
(d) Having shiny surface.

6. What is NOT one of the most important factors to judge the quality of a financial centre?

(a) Infrastructure.
(b) Business environment.
(c) People.
(d) Diversity.

7. Which of the following statement about monetary economy is incorrect?

(a) Broadly, there are two sectors in monetary economy: households and firms.
(b) Households provide labour and lands to firms.
(c) Firms are where productions are organized.
(d) Households sell products to firms.

8. Which of the following statement is true about the economy with financial system?

(a) All participants are either ultimate fund users or ultimate fund providers.
(b) Households cannot spend more than what they have earned and saved.
(c) Firms cannot invest more than what they have earned and saved.
(d) Money is available in the economy.

Short essay questions:

9. Discuss the role of money in the evolvement from barter economy to an advanced economy
with financial system.

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