I. Multiple Choice.

1. __________is the flow ofmoney from net lenders or financial intermediaries to net borrowers in a giventime period.

A. Credit     B. Income  C. Wealth    D.Deficit spending

2. Increases in credit cause_______________.

A. decreases in income andincreases in spending

B. increases in income andincreases in spending

C. increases in income and decreasesin spending

D. decreases in income anddecreases in spending

3. Decreases in credit cause______________.

A. decreases in income andincreases in spending

B. increases in income andincreases in spending

C. increases in income anddecreases in spending

D. decreases in income anddecreases in spending

4. Credit flows come from____________.

A. borrowing and lending acrosstraditional national borders

B. changes in lending atnondepository financial institutions

C. changes in credit extensionby depository institutions

D. all of the above

5. To the extent that lendingbypasses domestic depository institutions, the linkage between money andeconomic activities may be ____________.

A. strengthened     B. weakened  C. redundant  D. random

6. Historical data suggest thata sustained and significant rise in money supply or credit growth will tend to___________output growth and, wit a lag, tend at times to ___________theinflation rate.

A. raise; raise   B. lower; lower    C.raise; lower    D. lower;raise

7. The cost of credit is all ofthe following except _____________.

A. the return or yield on moneyto lenders

B. the interest rate associatedwith borrowing or lending money

C. equivalent to be the supplyof money

D. the cost to borrowers ofobtaining money

8. Fluctuations in economicactivities are ____________related to money and credit flows.

A. strongly     B. weakly     C. not     D. none of the above

9. Which of the following istrue? _____________.

A. In recent decades, thebanking system has been getting a declining share of credit extension.

B. Credit extension is much lessimportant than changes in the money supply in affecting economic activities

C. When the demand for moneyincreases, the interest rate decreases

D. The quantity demand of moneyis directly related to the interet rate

10. Which of the followingactions would not cause credit to increase, ceteris paribus?

A. Increases in prime rates

B. Reductions in requiredreserve ratios

C. Increases in cash assetsavailable for reserves

D. Increases in the demand formoney and credit

II Define brieflythe following terms and concepts.

1. credit

2. commercial credit

3. bank credit

4. public credit

5. onsumer credit

6. private credit

III Translate thefollowing sentences into Chinese.

1.    Credit in economicsrefers to behavior of borrowing and lending with the feature of repayment ofthe principal plus interest and is a special form of movement of value.

2.    What’s more,credit also plays the role in providing and creating means of exchange andmeans of payment.

3.    Banks can not onlyplace funds according to fund resources, but also create fund resources throughtheir use of funds, i.e. creating money through granting loans.

4.    Based on loan paymentschedules, consumer’s loans can be divided into loans repaid at maturity and loanson an installment plan.

5.    Private credit involvesautonomous, scattered and blind behavior of borrowing and lending, so the creditis hard to be standardized and regulated by government financial agencies.

IV Translate thefollowing sentences into English.

1.在信用活动中，银行和其他金融机构是货币资本所有者和使用者之间的中介，所以银行信用属于中介信用。

2.  银行信用克服了商业信用在规模、方向和信贷时间方面的局限性。

3. 作为吸收存款、发放贷款的企业，银行不仅能提供信用，还可以创造信用，并以低成本发放信用。

4.   消费信用可以提升消费者现有的物质和文化生活水平。

5. 民间信用是个人之间以货币或商品形式相互提供的信用。