Question

Looking at the core principles of money and banking (chapter 1), if more students defaulted on their student loans, we would expect
   A.   student loans to be easier to obtain.
   B.   more students to attend college.
   C.   student loan interest rates to rise.
   D.   all of the above.

Suppose that an Oswego student sets aside earinging from her summer job in a savings accounts in order to buy books in the Fall. In this case the money in the account is functioning as a
   A.   means of payment
   B.   unit of account
   C.   store of value

Financial instruments
   A.   are used soley as a store of value
   B.   are used soley as a way to transfer risk
   C.   can function as a means of payment, store of value or a way to transfer risk.
   D.   cannot function as a means of payment

As people shift their money from checking accounts to savings accounts, we would see
   A.   M1 fall and M2 rise
   B.   M1 rise and M2 fall
   C.   both M1 and M2 rise
   D.   M1 fall while M2 remains unchanged

Commodity money
   A.   has no intrinsic value
   B.   has value as a good even if it is not used for money.
   C.   can only be valued if it contains gold.
   D.   has value only by government decree.

Which of the following statements about financial markets is true?
   A.   Financial markets convey important information about the value of a security.
   B.   Financial markets raise the cost of trading with financial intermediaries.
   C.   Financial markets are only classified on the basis of their size.
   D.   Financial markets are a good example of unregulated markets.

When Google first offered its stock for sale to the public (its initial public offering or IPO) in April 2004 this took place in the
   A.   the primary market.
   B.   the secondary market.
   C.   the debt market.
   D.   the money market.

Answer 1

1) Option C is correct as banks would now not be willing to lend money which raise the rate of interest.

2) Option C is correct.

3) Option C is correct.

4) Option A is correct.

5) Option B is correct.

6) Option D is correct.

7) Option A is correct.