1. A strong US dollar tends to

   	A.	Reduce exports to foreign buyers
   	B.	Reduce imports from foreign sellers

1. What is the maturity classification for 30-year Treasury bonds?

   	A.	Short term
   	B.	Intermediate term
   	C.	Long term

1. Where do firms invest surplus funds that are only available for a short period of time?

   	A.	Commodity futures market
   	B.	Capital market
   	C.	Money market
   	D.	Real estate market

1. Overnight loans issued by the Federal Reserve to commercial banks are known as

   	A.	Repurchase agreements
   	B.	Federal funds
   	C.	Commercial paper
   	D.	Negotiable CD's

1. Which type of security has interest payments that are generally exempt from federal income taxes?

   	A.	Mortgage-backed securities
   	B.	Treasury bonds
   	C.	Municipal bonds
   	D.	Commercial loans

1. What do the authors mean when they state that financial intermediaries can achieve economies of scale with respect to transaction costs?

   	A.	Intermediaries can spread transaction costs across larger transaction volumes, so the cost per unit is lower.
   	B.	Intermediaries tend to specialize in certain types of transactions, so their costs are lower because they operate at lower volume than other types of financial firms.