Test Bank for Economics of Money Banking and

Financial Markets: Global Edition, 12th Edition,

Frederic S. Mishkin
Full chapter at: https://testbankbell.com/product/test-bank-
for-economics-of-money-banking-and-financial-markets-
global-edition-12th-edition-frederic-s-mishkin/
Table of Contents
PART I: INTRODUCTION 1
1. Why Study Money, Banking, and Financial Markets?
2. An Overview of the Financial System
3. What Is Money?
PART II: FINANCIAL MARKETS
4. The Meaning of Interest Rates
5. The Behavior of Interest Rates
6. The Risk and Term Structure of Interest Rates
7. The Stock Market, the Theory of Rational Expectations, and the
Efficient Market Hypothesis
PART III: FINANCIAL INSTITUTIONS
8. An Economic Analysis of Financial Structure
9. Banking and the Management of Financial Institutions
10. Economic Analysis of Financial Regulation
11. Banking Industry: Structure and Competition
12. Financial Crises in Advanced Economies
13. Financial Crises in Emerging Market Economies
PART IV: CENTRAL BANKING AND THE CONDUCT OF
MONETARY POLICY
14. Central Banks
15. The Money Supply Process
16. Tools of Monetary Policy
17. The Conduct of Monetary Policy: Strategy and Tactics
PART V: INTERNATIONAL FINANCE AND MONETARY POLICY
18. The Foreign Exchange Market
19. The International Financial System
PART VI: MONETARY THEORY
20. Quantity Theory, Inflation, and the Demand for Money
21. The IS Curve
22. The Monetary Policy and Aggregate Demand Curves
23. Aggregate Demand and Supply Analysis
24. Monetary Policy Theory
25. The Role of Expectations in Monetary Policy
26. Transmission Mechanisms of Monetary Policy
CHAPTERS ON THE WEB
1. The ISLM Model
2. Nonbank Finance
3. Financial Derivatives
4. Conflicts of Interest in the Financial Services Industry
 Another random document
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 O N A C .
(Presented to Mr. Gladstone.)
The Pleased Premier Sings:—
I love it, I love it; will W , now, dare
To nag me for loving my new Arm-chair?
I shall treasure it long, ’tis a genuine prize,
Of cosy make, of convenient size.
’Twill be bound to my heart by a thousand links,
By memories pleasant of “forty winks.”
Thanks, men of Greenwich, whose thoughtful care
Supplies me this capital new Arm-chair.

I have sat in the Commons this many a day,

Till my eyes are dimmish, my locks gone grey:
Oh, the hours I have lounged, and—with trouble—smiled
Whilst C cheeked or the Pats ran wild;
Till the Treasury cushions seemed cold as lead,
And hard as a prisoner’s timber bed.
By Jove, how I wish I could wheel you there
And lounge on your cushions, my new Arm-chair!

But H ’ waiting, and I must go;

He can’t stand his Whitebait cold, you know.
Were it not for the feed and these swells at my side,
My talk might flow on in a lava-like tide.
Ah! excuse this tear that bedews my cheek,
I should very much like to talk on for a week.
Now myself from your presence I really must tear,
But I thank you once more for my new Arm-chair.
Punch. August 27, 1881.
 S .—The House of Commons. The E -S is discovered
gazing sadly at the seat he has lately vacated. At length, satisfying himself
that he is alone, he relieves his soul in song as follows;—
“I loved it, I loved it; and who would dare
To chide me for loving that Grand Old Chair?
When they chose me first to its seat to rise,
I looked on it then as a precious prize,
And my heart with joy and with pride was big
When I put on my new full-bottomed wig.
I was under a spell as I first sat there,
And a sacred thing was that Grand Old Chair!

“And all at first happened well for me,

And my life was calm as calm could be;
The ‘Ayes’ were gentle, the ‘Noes’ were kind,
And rarely to sitting late inclined;
Whilst night after night ’twas my happy fate
To retire for my ‘chop’ at half-past eight;
To retire and return, unvexed by care,
To sit—aye, and doze, in that Grand Old Chair!

“But as years rolled on, and the sessions sped,

My idol was shattered, my hopes all fled:
For there came o’er the scene a parlous change,
As the new M.P.’s brought their manners strange;
Till one night, alas! was ‘Obstruction’ born,
And I knew what it was to sit till morn;
Ah! I learned what a Speaker’s strength could bear,
As I sat out my life in that Grand Old Chair.

“’Tis past! ’tis past! but I gaze on it now

With quivering lips and with throbbing brow;
For there full oft have I sat in vain,
Till the day has peeped through the window pane;
’Twas there I was badgered; ’twas there I heard
My solemn rulings declared absurd—
 But I loved it! I loved it! and cannot tear
My soul from that once-prized Grand Old Chair.”

As the above is being softly sung, the S E , attracted by the

sound, returns to the House, and remains an unobserved listener till the
conclusion of the song, when, remarking M . P ’ presence, the E -
S thus addresses him:—
“Ah, ’tis well, my new successor,
Aye, ’tis meet you thus have found me
Lingering here in semi-darkness,
And addressing mournful lyrics
To the furniture about me.”
Truth. February 28, 1884.
 T O A -C .
[“A German Professor has discovered that all the woodwork about our
houses has power to absorb ‘noxious juices’ while still growing in its native
forest, and that when a tree becomes part of the domestic furniture, and is
cut up into chairs and tables and bookshelves, it immediately begins to pour
its ‘noxious juices’ out into the air of the room.”—Daily Paper.]
I dread it, I dread it! and who shall dare
To chide me for dreading that old arm-chair?
I’ve treasured it long as an antique prize,
But Science has suddenly opened my eyes;
So now I say to my startled heart
That ’twere better the chair and I should part.
Would you know my reason?—a mother sat there,
And became the prey of that old arm-chair.

In childhood’s hour I lingered near

That treacherous seat without a fear,
And mother, poor soul, no tremour knew
As she worked at her knitting the morning through,
For German savants had yet to produce
Their ghastly theory of “noxious juice,”
And my parent guessed at no cause for scare
In the poisoned breath of her old arm-chair.

The doctor watched her many a day,

While she took her physic and pined away;
And it failed to strike him that p’raps her cure
Might be found in a smash of furniture.
Time passed on, and I heard with glee
That mater intended to try the sea;
But though she recovered in Brighton air,
I never suspected the old arm-chair.

I was guileless then, but I gaze on it now

With a fluttering pulse and a bended brow,
’Twas there she sickened and almost died—
 Of chair—as professors sage decide.
Say it is folly, and deem me weak,
For my “creepy” spine and my blanching cheek;
But I dread it, I dread it! and mean to bear
To the broker’s shop that old arm-chair.
Funny Folks. May 29, 1886.
 T D ’ C .
I hate it, I hate it, and who shall dare
To chide me for hating that dentist’s chair?
I hated it first in my early youth,
When I groaned in its depths with an aching tooth.

And many and keen are the pangs through my soul,

And the terror I feel is beyond control;
I could gnash my teeth in my wild despair,
As I gaze on that terrible, terrible chair.

It has held me many and many a day,

When I fain would have been in the fields at play
And I hated the dentist when first I sat
In the chair, and he said, “Take off your hat.”

Years roll on and are quickly fled,

And my teeth became shattered within my head:
But I know how much the heart can bear,
When I sit in that horrible, horrible chair.

Will it ever be thus? I gaze on it now,

With affright in my soul and care on my brow;
’Twas there they were stopped; ’twas there they were scaled;
’Twas there with the forceps that I was assailed.

Say it is folly, and call me weak,

While the raging nerves puff out my cheek,
But I hate it to-day in my toothless despair,
And I’ll hate it for ever, that vile arm-chair.
A. L. D.
Modern Society. April 17, 1886.

——:o:——
S N .
(Another parody of Eliza Cook,)
 That gridiron by the mantel-piece,
Its look gives every nerve a thrill;
That thing of home begrimed with grease,
Whereon our sprats we learn’d to grill.
November—month to childhood dear,
Old month of Civic feasts and sights,
To see that gridiron so near,
Fills my sad heart with home delights.

November—I remember well

The day when I to market hied,
In search of one with sprats to sell—
Sprats in which childhood might confide.
I bought them, and the savoury fish
On yonder gridiron then were broiled
Experience is a bitter dish,
I had it then—the sprats were spoiled!
Punch’s Almanac, 1846.

——:o:——
 WOODMAN, SPARE THAT TREE.
As several of the following parodies are rather out of date extracts only
are given.
P W F .
Lincoln, spare that tree,
Touch not a single bough,
Though in the way to be,
Oh, stand up for it now.
Still, let its shade expand,
Where, round the social pot,
The H cabmen stand—
Oh, L , harm it not!
* * * * *
Thy sire, great Clumber’s King,
Thou’st certain to offend—
His son do such a thing!—
The world draws to an end
Old Laws, old Dukes, old Trees,
Delay, decay, dry-rot:
Let P do as he please,
But, L , harm them not!
Punch. 1846.
[While Lord Lincoln, son of the Duke of Newcastle, was First
Commissioner of Woods and Forests, a proposal was made to cut down
some of the old trees in the West-end of London, which were said to be in
the way.]
T H P C C .
Gasman, light that clock,
The time I cannot see;
It can’t be more than twelve,
 And yet it looks like three!
Its hands are all confused,
Its numbers none can trace:
Say, is that humble clock
Ashamed to show its face!

It can’t be very late:

True, I’ve been out to sup:
But, ho! what says the clock?
Come, Gasman, light it up.
Say, can the mist be caused
By fumes of generous wine?
Is it three-quarters past eleven,
Or is it only nine!

Is it half after twelve,

Or six, or eight, or two?
That dismal rushlight kept inside
No good on earth can do.
When I go home to bed
I’m quite afraid to knock,
If I’ve no notion of the hour—
So, Gasman light that clock.
Punch. 1846.
 T “T L .”
Frenchman, spare that tree,
Its roots lie very low;
You’d better let it be—
Elsewhere ’twill never grow
* * * * *
Vitality, to-day,
Within it there may be,
It perishes when moved away—
So, Frenchman, spare that tree.
Punch. 1848.
 A I A P .
(By a very Common Councilman).
Gladstone, spare that Tree!
(Of course I means the Corporation.)
Touch not a single bough;
(That is, neither the Court of Aldermen or the Court of Common
Council.)
In youth it sheltered me,
When I was bound a Prentice.)
And I’ll protect it now.
(Now that I’m a full-blown Common Councilman.)

’Twas my forefather’s hand

(A jolly long time ago, when the Saxons and Danes was here.)
That placed it near this spot;
(At the bottom of King Street, Cheapside.)
Then, G , let it stand,
(Till it’s blowed down as well as blowed up.)
Thy Ax should harm it not.
(Ax of Parlement, of course.)

Oft, when a careless child,

(Summut about 17,)
Beneath its shades I heard,
(Guildhall, of course,)
The woodnotes sweet and wild,
(But rather expensive,)
Of many a foreign bird.
(From the Italian Opera.)

My Mother kissed me there,

(In the Chamberlain’s Office, when I took up my Freedom.)
My Father pressed my hand
(With a sovereign in it, the fust I ever had:)
I ask then, with a tear,
(Of course, that’s all my eye,)
To let the old Oak stand!
 (Too obvious to require explanation.)

I’ve crossed the foaming wave;

(Dover to Calais—oh, Steward!)
I’ve braved the cannon-shot!
(Figuratively, at the Tower;)
While I’ve a hand to save,
(That is, till I’ve lost ’em both,)
Thy Ax shall harm it not!
(Ax of Parlement, as before.)
Punch. February 11, 1882.
 “S ,S T !”
[“It is beyond all measure the finest tree in London, and being of a kind
that defies London smoke, it actually seems to enjoy and thrive upon it. It is
sad to think that we have Vandals paid by the public to do such irreparable,
wanton mischief.”—Mr. Nasmyth on the cutting down of the old South
Kensington plane tree.]
S , spare that tree!
Touch not a single bough!
For years you’ve let it be:—
Why set upon it now?
I know not whose the hand
That placed it on that spot;
But, S , let it stand,
Or else you’ll get it hot!

The old familiar plane

That decks this end of town:—
Why, those are scarcely sane
Who want to cut it down.
South Kensington secures
Its end with many a joke;
But if you must have yours,—
OS , spare this stroke!

When, in my childhood’s joy,

T’wards Fulham’s fields I strayed;
C M still a boy,
Grew young beneath its shade.
And later, it was here,
Ere Brompton saw its close,—
Forgive this foolish tear,
The dear old boilers rose!

So, if you’ve work in view,

Cut down—I’ll not repine—
A salary or two,
 But not this tree of mine!
And though in wild dismay
Your underlings complain,—
OS , cut away,
But don’t cut down my plane!
Punch. July 23, 1881.
 “C ,S C .”
[The Chancellor of the Exchequer proposed to abolish the old half-
sovereign and issue a new one, which should be worth only nine shillings in
gold.]
Childers, spare that coin,
Historically grand,
Thou wouldst its tenth purloin,
But, prithee, stay thy hand.
It aye has held for me
A pure ten-shilling joy.
So, Childers, let it be,
Nor mix it with alloy.

That old familiar piece,

Whose glory and renown
Would straightway sink and cease,
If thou shouldst chip it down!
Childers, forbear this stroke,
’Gainst which we all protest;
Oh, say that when you spoke,
You only spoke in jest.

Oft, when a careless lad,

The golden chink I heard,
For I an uncle had
Who tipped me “like a bird.”
On sweetstuff, apt to smear
One’s clothes, the coin was spent;
I ask thee with a tear,
Oh, drop thy ten per cent.

My heartstrings round thee cling

Close as thy rim, old friend—
Remain a handy thing
To borrow or to lend.
Old piece, still circulate,
 And, Childers, of thy grace,
Think well and hesitate,
Ere thou our coin debase.
Funny Folks. May 10, 1884.

——:o:——
 THE IVY GREEN.
Oh! a dainty plant is the Ivy green,
That creepeth o’er ruins old!
Of right choice food are his meals, I ween,
In his cell so lone and cold.
The walls must be crumbled, the stones decayed,
To pleasure his dainty whim;
And the mouldering dust that years have made,
Is a merry meal for him.
Creeping where no life is seen,
A rare old plant is the Ivy green.

Fast he stealeth on, though he wears no wings,

And a staunch old heart has he.
How closely he twineth, how tight he clings,
To his friend the huge Oak Tree!
And slyly he traileth along the ground,
And his leaves he gently waves,
And he joyously hugs and crawleth round
The rich mould of dead men’s graves.
Creeping where grim death has been,
A rare old plant is the Ivy green.

Whole ages have fled, and their works decayed,

And nations have scattered been;
But the stout old Ivy shall never fade,
From its hale and hearty green.
The brave old plant in its lonely days,
Shall fatten upon the past:
For the stateliest building man can raise,
Is the Ivy’s food at last.
Creeping on, where time has been,
A rare old plant is the Ivy green.
C D .
 This song first appeared in Chapter VI. of The Pickwick Papers, which
were originally published in monthly parts, commencing in April, 1836.
Ten years later Dickens started The Daily News, the first number of which
was published in London on January 21, 1846. For many years the paper
had but a struggling existence. Although Dickens only edited it for a few
months, it was well known that he was interested in its success, so that the
author of the following poem, whilst sneering at The Daily News, had a
motive in choosing Dickens’s poem as the model for his parody.
T D N .
Oh! a dreary print is The Daily News,
And its life is a wonder to all.
It puts in advertisements others refuse,
But sooner or later must fall.
Its leaders are heavy, confused its page,
And dismal its general tone.
In club, or in coffee-house, nothing but rage
Is, when it is offered, shown.
Sent for nothing to all who choose,
A losing game is The Daily News.

Oh! The Daily News began with a bang,

And was going to shut up The Times.
And twaddled that murderers never should hang,
And printed “large sympathy” rhymes.
But still the old gallows its reign enjoyed:
And still did “The People” refuse,
To trust to the rhymes that their friends deployed,
In the sheets of The Daily News.
What large sums they have learnt to lose,
Who first embarked in The Daily News.

Oh! The Daily News never publishes “wants”

Of footmen, or nurses, or cooks.
Nor many announcements of ships or of sales,
But only the Whitefriars books;
Which pretty well shows what everyone knows,
 By no one it ever is seen,
And soon shall we, when it ceases to be,
Forget that it ever has been.
Let it abuse or praise if it choose,
There’s nobody minds The Daily News.
The Man in the Moon. Vol. III. 1848.
 G P S .
Oh! a splendid soup is the true Pea Green,
I for it often call;
And up it comes in a smart tureen,
When I dine in my banquet hall.
When a leg of mutton at home is boiled,
The liquor I always keep,
And in that liquor (before ’tis spoil’d)
A peck of peas I steep.
When boil’d till tender they have been,
I rub through a sieve the peas so green.

Though the trouble the indolent may shock,

I rub with all my power;
And having returned them to the stock,
I stew them for more than an hour;
Then of younger peas I take some more,
The mixture to improve,
Thrown in a little time before,
The soup from the fire I move,
Then seldom a better soup is seen,
Than the old familiar Soup Pea Green.

Since first I began my household career,

How many my dishes have been!
But the one that digestion never need fear,
Is the simple old soup Pea Green.
The giblet may tire, the gravy pall,
And the turtle lose its charm;
But the Green Pea triumphs over them all,
And does not the slightest harm.
Smoking hot in a smart tureen,
A rare old soup is the true Pea Green!
Punch. 1852.