What is the most important similarity between a bill of exchange and fiat money?

Taxes can be paid with either

The ability to settle debts with both

Both are issued by private banks

Both rely on trust to be accepted in use

Which of the following explains why people tended to hold onto gold coins and not spend them?

Law of supply and demand

Greshams law

Law of John Maynard Keynes

Law of diminishing returns

Which of the following is a root

cause of hyperinflation?

Political corruption

High interest rates

High levels of unemployment

Over reliance on export sector

Ancient legal systems of ancient Mesopotamia were developed mainly to?

Protect property rights

Protect human rights

Protect borrower's rights

Protect against personal bankruptcy

What is the main reason China is now concerned about the value of their currency falling too far below the US dollar?

Trade deficits

Inflation

Upsetting the US president

Deflation

Financial markets are primarily designed to facilitate which of the following activities?

Elimination of financial risk

Stimulate economic growth

Raising of capital

Development of important regulations

Which of the following is not

likely to occur during times of hyperinflation?

Money loses its purchasing power

People on fixed incomes are the hardest hit

Banks will issue more loans

It can stimulate the export market

What was the main cause of gold prices rising dramatically in 1971?

The elimination of the gold standard

The pegging of gold to the U.S. dollar

The rise of oil prices

The sale of gold reserves on the world markets

Which of the following fields describes people's irrational behaviour in the financial markets?

Game Theory

Rational Expectations Model

Efficient Markets Theory

Behavioural Economics

What is the main effect of deflation on an economy?

Rising interest rates

Rising tax rates

Rising prices

Falling prices

The Efficient Markets theory indicates which of the following?

Stock markets are highly efficient and rational

Stock markets are somewhat irrational and somewhat predictable

Bond markets are more volatile than stock markets

Bond markets are poor predictors of future recessions

What is the main reason for Canada discontinuing the penny?

Purchasing power parity

Poor quality metal available

Too heavy to carry

Inflation has reduced its value

If you purchase a stock for $18 and sell it for $20, the amount calculated is called:

A capital gain

A capital loss

A dividend loss

A dividend gain

The currency market is characterized as which of the following?

The smallest financial market

The largest financial market

The most complicated market

The oldest market

The most "liquid" items of barter often evolved into which of the following?

cash money

silver bars

coin money

proto money

Which of the following methods of financing government spending tends to be less risky from a political standpoint?

Cutting spending programs

Increased taxation

Printing money

Borrowing money

Which of the following has the least impact on the value of the Canadian dollar?

Exports

Interest rates

Oil prices

Stock market

he Mississippi Bubble describes which of the following events in 1720 France?

Bond Market Crash

Devaluation of French Money

War with England

The Black Death

What is the primary reason China has pegged (tied) their currency to the US dollar?

Inflation expectations

Mounting pressure from USA

Mounting pressure from Europe

Stimulate export growth

Which part of the world has the greatest use of mobile money because of the lack of banks?

Africa

Asia

South America

Eastern Europe

What is the name of the financial activity the currency trader George Soros used to profit from the drop in the value of the British Pound?

Short-sellinG

Buy and hold

Technical analysis

Currency default swaps

If you experience deflation in an economy, which of the following would you likely want to do?

Lend money

Save money

Borrow money

Both A and B above

Which one of the following institutions uses the 5 Cs of credit as an assessment?

Insurance company

Bank

Stock broker

Currency trader

Which of the following best

describes why gold has held its value vs. paper money?

Standard of value

Store of value

Medium of exchange

Government backing

Which of the following economists was the biggest proponent of free markets?

J.M. Keynes

Milton Friedman

Karl Marx

Joseph Stiglitz