Test Bank for Economics of Money Banking and Financial Markets 11th

Edition by Mishkin ISBN 0133836797 9780133836790

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Economics of Money, Banking, and Financial Markets, 11e (Mishkin)

Chapter 2 An Overview of the Financial System

2.1 Function of Financial Markets

1) Every financial market has the following

characteristic. A) It determines the level of interest rates.
B) It allows common stock to be
traded. C) It allows loans to be made.
D) It channels funds from lenders-savers to borrowers-
spenders. Answer: D
AACSB: Reflective Thinking

2) Financial markets have the basic function of

A) getting people with funds to lend together with people who want to borrow funds.
B) assuring that the swings in the business cycle are less pronounced.
C) assuring that governments need never resort to printing money.
D) providing a risk-free repository of spending power.
Answer: A
AACSB: Reflective Thinking

3) Financial markets improve economic welfare

because A) they channel funds from investors to savers.
B) they allow consumers to time their purchase
better. C) they weed out inefficient firms.
D) they eliminate the need for indirect
finance. Answer: B
AACSB: Reflective Thinking

4) Well-functioning financial markets

A) cause inflation.
B) eliminate the need for indirect finance.
C) cause financial crises.
D) allow the economy to operate more
efficiently. Answer: D
AACSB: Reflective Thinking

5) A breakdown of financial markets can result in

A) financial stability.
B) rapid economic growth.
C) political instability.
D) stable prices.
Answer: C
AACSB: Reflective Thinking

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Copyright © 2016 Pearson Education, Inc.
6) The principal lender-savers are
A) governments.
B) businesses.
C) households.
D) foreigners.
Answer: C
AACSB: Application of Knowledge

7) Which of the following can be described as direct

finance? A) You take out a mortgage from your local bank.
B) You borrow $2500 from a friend.
C) You buy shares of common stock in the secondary market.
D) You buy shares in a mutual fund.
Answer: B
AACSB: Analytical Thinking

8) Assume that you borrow $2000 at 10% annual interest to finance a new business project. For
this loan to be profitable, the minimum amount this project must generate in annual earnings is
A) $400.
B) $201.
C) $200.
D) $199.
Answer: B
AACSB: Analytical Thinking

9) You can borrow $5000 to finance a new business venture. This new venture will generate
annual earnings of $251. The maximum interest rate that you would pay on the borrowed funds
and still increase your income is
A) 25%.
B) 12.5%.
C) 10%.
D) 5%.
Answer: D
AACSB: Analytical Thinking

10) Which of the following can be described as involving direct finance?

A) A corporation issues new shares of stock.
B) People buy shares in a mutual fund.
C) A pension fund manager buys a short-term corporate security in the secondary market.
D) An insurance company buys shares of common stock in the over-the-counter
markets. Answer: A
AACSB: Analytical Thinking

2
Copyright © 2016 Pearson Education, Inc.
11) Which of the following can be described as involving direct
finance? A) A corporation takes out loans from a bank.
B) People buy shares in a mutual fund.
C) A corporation buys a short-term corporate security in a secondary market.
D) People buy shares of common stock in the primary markets.
Answer: D
AACSB: Analytical Thinking

12) Which of the following can be described as involving indirect

finance? A) You make a loan to your neighbor.
B) A corporation buys a share of common stock issued by another corporation in the primary
market.
C) You buy a U.S. Treasury bill from the U.S. Treasury at
TreasuryDirect.gov. D) You make a deposit at a bank.
Answer: D
AACSB: Analytical Thinking

13) Which of the following can be described as involving indirect finance?

A) You make a loan to your neighbor.
B) You buy shares in a mutual fund.
C) You buy a U.S. Treasury bill from the U.S. Treasury at Treasury Direct.gov.
D) You purchase shares in an initial public offering by a corporation in the primary
market. Answer: B
AACSB: Analytical Thinking

14) Securities are for the person who buys them, but are for the
individual or firm that issues them.
A) assets; liabilities
B) liabilities; assets
C) negotiable; nonnegotiable
D) nonnegotiable; negotiable
Answer: A
AACSB: Reflective Thinking

15) With finance, borrowers obtain funds from lenders by selling them securities
in the financial markets.
A) active
B) determined
C) indirect D)
direct Answer:
D
AACSB: Application of Knowledge

3
Copyright © 2016 Pearson Education, Inc.
16) With direct finance, funds are channeled through the financial market from the
directly to the .
A) savers, spenders
B) spenders, investors
C) borrowers, savers
D) investors, savers
Answer: A
AACSB: Reflective Thinking

17) Distinguish between direct finance and indirect finance. Which of these is the most
important source of funds for corporations in the United States?
Answer: With direct finance, funds flow directly from the lender/saver to the borrower. With
indirect finance, funds flow from the lender/saver to a financial intermediary who then
channels the funds to the borrower/investor. Financial intermediaries (indirect finance) are the
major source of funds for corporations in the U.S.
AACSB: Reflective Thinking

2.2 Structure of Financial Markets

1) Which of the following statements about the characteristics of debt and equity is FALSE?
A) They can both be long-term financial instruments.
B) They can both be short-term financial instruments.
C) They both involve a claim on the issuer's income.
D) They both enable a corporation to raise funds.
Answer: B
AACSB: Reflective Thinking

2) Which of the following statements about the characteristics of debt and equities is TRUE?
A) They can both be long-term financial instruments.
B) Bond holders are residual claimants.
C) The income from bonds is typically more variable than that from
equities. D) Bonds pay dividends.
Answer: A
AACSB: Reflective Thinking

3) Which of the following statements about financial markets and securities is TRUE?
A) A bond is a long-term security that promises to make periodic payments called dividends
to the firm's residual claimants.
B) A debt instrument is intermediate term if its maturity is less than one year.
C) A debt instrument is intermediate term if its maturity is ten years or longer.
D) The maturity of a debt instrument is the number of years (term) to that instrument's expiration
date.
Answer: D
AACSB: Reflective Thinking

4
Copyright © 2016 Pearson Education, Inc.
Another document from Scribd.com that is
random and unrelated content:
"H, O, Na, Mg, Fe, Si, K, and Ca. And we, dear people, have Th, which
Russell has not. Walt, call the metallurgical lab and have 'em whip up a
batch."
"Cook to a fine edge and serve with a spray of parsley? Or do we cut it
into cubes—"
"Go ahead," said Channing. "Be funny. You just heard the man say that
dissimilar dynode-cathodes do not work. What we need for our solar
beam is a dynode of Russell's Mixture so that it will be similar to our
cathode—which in this case is Sol. Follow me?"
"Yeah," said Walt. "I follow, but brother I'm a long way behind. But I'll
catch up," he promised as he made connection between his suit-radio and
the Station communicator system. "Riley," he said, "Here we go again.
Can you whip us up a batch of Russell's Mixture?"
Riley's laugh was audible to the others, since it was broadcast by Walt's
set. "Yeah, man, we can—if it's got metal in it? What, pray tell, is
Russell's Mixture?"
Walt explained the relation between Russell's Mixture and the
composition of Sol.
"Sun makers, hey?" asked Riley. "Is the chief screwball there?"
"Yup," said Walt, grinning at Don.
"Sounds like him. Yeah, we can make you an alloy consisting of Russell's
Mixture. Tony's got it here, now, and it doesn't look hard. How big a
dynode do you want?"
Walt gave him the dimensions of the dynode in the solar tube.
"Cinch," said Riley. "You can have it in two hours."
"Swell."
"But it'll be hotter than hell. Better make that six or seven hours. We may
run into trouble making it jell."
"I'll have Arden slip you some pectin," said Walt. "Tomorrow morning
then?"
"Better. That's a promise."
Walt turned to the rest. "If any of us can sleep," he said, "I'd suggest it.
Something tells me that tomorrow is going to be one of those days that
mother told me about. I'll buy a drink."
Walt opened the anode-coupler circuit, and the needle of the output
ammeter slammed across the scale and wound the needle halfway around
the stop pin. The shunt, which was an external, high-dissipation job,
turned red, burned the paint off of its radiator fins, and then proceeded to
melt. It sputtered in flying droplets of molten metal. Smoke spewed from
the case of the ammeter, dissipating in the vacuum of the blister.
Walt closed the coupler circuit.
"Whammo!" he said. "Mind blowing a hundred-amp meter?"
"No," grinned Don. "T have a thousand amp job that I'll sacrifice in the
same happy-hearted fashion. Get an idea of the power?"
"Voltmeter was hanging up around ten thousand volts just before the amp-
meter went bye-bye."
"Um-m-m. Ten thousand volts at a hundred amps. That is one million
watts, my friends, and no small potatoes. To run the Station's
communicating equipment we need seven times that much. Can we do
it?"
"We can. I'll have Jim Warren start running the main power bus down
here and we'll try it. Meanwhile, we've got a healthy cable from the
generator room; we can run the noncommunicating drain of the Station
from our plaything here. That should give us an idea. We can use a couple
of million watts right there. If this gadget will handle it, we can make one
that will take the whole load without groaning. I'm calling Jim right now.
He can start taking the load over from the generators as we increase our
intake. We'll fade, but not without a flicker."
Walt hooked the output terminals of the tube to the huge cable blocks,
using sections of the same heavy cable.
Jim Warren called: "Are you ready?"
"Fade her in," said Walt. He kept one eye on the line voltmeter and
opened the anode-coupler slightly. The meter dipped as Warren shunted
the Station load over to the tube circuit. Walt brought the line voltage up
to above normal, and it immediately dropped as Warren took more load
from the solar intake. This jockeying went on for several minutes until
Warren called: "You've got it all. Now what?"
"Start running the bus down here to take the communications load," said
Don. "We're running off of an eight hundred thousand mile cathode now,
and his power output is terrific. Or better, Jim, run us a high-tension line
down here and we'll save silver. We can ram ten thousand volts up there
for transformation. Get me?"
"What frequency?"
"Yeah," drawled Channing, "have Charley Thomas run us a control line
from the primary frequency standard. We'll control our frequency with
that. O.K.?"
"Right-o."
Channing looked at the set-up once more. It was singularly
unprepossessing, this conglomeration of iron and steel and plastic. There
was absolutely nothing to indicate the two and one third million watts of
power that coursed from Sol, through its maze of anodes, and into the
electric lines of Venus Equilateral. The cathodes and dynode glowed with
their usual dull red glow, but there was no coruscating aura of power
around the elements of the system. The gymbals that held the big tube slid
easily, permitting the tube to rotate freely as the selsyn motor kept the
tube pointing at Sol. The supply cables remained cool and operative, and
to all appearances, the set-up was inert.
"O.K., fellows," said Channing. "This is it—"
He was interrupted by the frantic waving of Kingman, from the other side
of the air lock.
"I feel slightly conscience-stricken," he said with a smile that showed that
he didn't mean it at all. "But let us go and prepare the goat for shearing."

Kingman's trouble was terrific, according to him. "Mr. Channing," he

complained, "you are not following our wishes. And you, Mr. Farrell,
have been decidedly amiss in your hobnobbing with the engineers here.
You were sent out as my consultant, not to assist them in their endeavors."
"What's your grief?" asked Channing.
"I find that your laboratory has been changing the circuits without having
previously informed me of the proposed change," complained Kingman.
"I feel that I am within my rights in removing the tubes brought here.
Your investigations have not been sanctioned—" he looked out through
the air lock. "What are you doing out there?"
"We have just succeeded in taking power from the sun," said Don. He
tried to keep his voice even, but the exultation was too high in him, and
his voice sounded like sheer joy.
"You have been—" Kingman did a double-take. "You what?" he yelled.
"Have succeeded in tapping Sol for power."
"Why, that's wonderful."
"Thank you," said Don. "You will no doubt be glad to hear that Wes
Farrell was instrumental in this program."
"Then a certain part of the idea is rightfully the property of Terran
Electric," said Kingman.
"I am afraid not," said Don. "Dr. Farrell's assistance was not requested.
Though his contribution was of great value, it was given freely. He was
not solicited. Therefore, since Terran Electric was not consulted formally,
Dr. Farrell's contribution to our solar power beam can not be considered
as offering a hold on our discovery."
"This is true, Dr. Farrell?"
"I'm afraid so. You see, I saw what was going on and became interested,
academically. I naturally offered a few minor suggestions, in somewhat
the same manner as a motorist will stop and offer another motorist
assistance in changing a tire. The problem was interesting to me and as a
problem, it did not seem to me—"
"Your actions in discussing this with members of the Venus Equilateral
technical staff without authorization will have cost us plenty," snapped
Kingman. "However, we shall deal with you later."
"You know," said Farrell with a cheerfully malicious grin, "if you had
been less stuffy about our tubes, they might be less stuffy about my
contribution."
"Ah, these nonlegal agreements are never satisfactory. But that is to be
discussed later. What do you intend to do with your invention, Dr.
Channing?"
Channing smiled in a superior manner. "As you see, the device is small.
Yet it handles a couple of million watts. An even smaller unit might be
made that would suffice to supply a home, or even a community. As for
the other end, I see no reason why the size might not be increased to a
point where it may obsolete all existing power-generating stations."
Kingman's complexion turned slightly green. He swallowed hard. "You,
of course, would not attempt to put this on the market yourself."
"No?" asked Channing. "I think you'll find that Interplanetary
Communications is as large, if not larger, than Terran Electric, and we
have an enviable reputation for delivering the goods. We could sell
refrigerators to the Titan Colony if we had the V-E label on them and
claimed they were indispensable. Our escutcheon is not without its
adherents."
"I see," said Kingman. His present volubility would not have talked a jury
into freeing the armless wonder from a pickpocketing charge. "Is your
invention patentable?"
"I think so. While certain phases of it are like the driver tube, which, of
course, is public domain, the applications are quite patentable. I must
admit that certain parts are of the power transmission tube, but not
enough for you to claim a hold, I know. At any rate, I shall be busy for the
next hour, transmitting the details to Washington, so that the
Interplanetary Patent Office may rule on it. Our Terran legal department
has a direct line there, you know, and they have been directed to maintain
that contact at all cost."
"May I use your lines?"
"Certainly. They are public carriers. You will not be restricted any more
than any other man. I am certain that our right to transmit company
business without waiting for the usual turn will not be contested."
"That sounds like a veiled threat."
"That, sounds like slander!"
"Oh no. Believe me. But wait, Dr. Channing. Is there no way in which we
may meet on a common ground?"
"I think so. We want free hand in this tube proposition."
"For which rights you will turn over a nominal interest in solar power?"
"Forty percent."
"But we—"
"I know, you want control."
"We'd like it."
"Sorry. Those are our terms. Take 'em or leave 'em."
"Supposing that we offer you full and unrestricted rights to any or all
developments you or we make on the Martian transmission tubes?"
"That might be better to our liking."
"We might buck you," said Kingman, but there was doubt in his voice.
"Yes? You know, Kingman, I'm not too sure that Venus Equilateral wants
to play around with power except as a maintenance angle. What if we toss
the solar beam to the public domain? That is within our right, too."
Kingman's green color returned, this time accompanied with beads of
sweat. He turned to Farrell. "Is there nothing we can do? Is this
patentable?"
"No—Yes," grinned Farrell.
Kingman excused himself. He went to the office provided for him and
began to send messages to the Terran Electric offices at Chicago. The
forty minute wait between message and answer was torture to him, but it
was explained to him that light and radio crossed space at one hundred
and eighty-six thousand miles per second and that even an Act of
Congress could do nothing to hurry it. Meanwhile, Channing's description
tied up the Terran Beam for almost an hour at the standard rate of twelve
hundred words per minute. Their answers came within a few minutes of
one another.
Channing tossed the 'gram before Kingman. "Idea definitely patentable,"
said the wire.
Kingman stood up. Apparently the lawyer believed that his
pronouncement would carry more weight by looming over the smiling,
easy-going faces of his parties-of-the-second-part. "I am prepared to
negotiate with your legal department; offering them, and you, the full
rights to the use of the transmission tube. This will include full access to
any and all discoveries, improvements, and/or changes made at any time
from its discovery to the termination of this contract, which shall be
terminated only by absolute mutual agreement between Terran Electric
and Interplanetary Communications.
"In return for this, Interplanetary Communications will permit Terran
Electric to exploit the solar beam tube fully and freely, and exclusively—"
"Make that slightly different," said Channing. "Terran Electric's rights
shall prevail exclusively—except within the realm of space, upon man-
made celestial objects, and upon the satellites and minor natural celestial
bodies where stations of the Interplanetary Communications Company are
established."
Kingman thought that one over. "In other words, if the transport
companies desire to use the solar beam, you will hold domain from the
time they leave an atmosphere until they again touch—"
"Let's not complicate things," smiled Don cheerfully. "I like
uncomplicated things."
Kingman smiled wryly. "I'm sure," he agreed with fine sarcasm. "But I
see your point. You intend to power the communications system with the
solar beam. That is natural. Also, you feel that a certain amount of
revenue should be coming your way. Yes, I believe that our legal
departments can agree."
"So let's not make the transport companies change masters in mid-space,"
smiled Don.
"You are taking a lot on your shoulders," said Kingman. "We wouldn't
permit our technicians to dictate the terms of an agreement."
"You are not going to like Venus Equilateral at all," laughed Don. "We
wouldn't permit our legal department to dabble in things of which they
know nothing. Years ago, when the first concentric beam was invented,
which we now use to punch a hole in the Heaviside Layer,
Communications was built about a group of engineers. We held the three
inner planets together by the seat of our pants, so to speak, and nurtured
communications from a slipshod, hope-to-God-it-gets through proposition
to a sure thing. Funny, but when people were taking their messages catch
as catch can, there was no reason for legal lights. Now that we can and do
insure messages against their loss, we find that we are often tangled up
with legal red tape.
"Otherwise, we wouldn't have a lawyer on the premises. They serve their
purpose, no doubt, but in this gang, the engineers tell the attorneys how to
run things. We shall continue to do so. Therefore you are speaking with
the proper parties, and once the contract is prepared by you, we shall have
an attorney run through the whereases, wherefores, and parties of the first,
second, and third parts to see that there is no sleight of hand in the
microscopic type."
"You're taking a chance," warned Kingman. "All men are not as
fundamentally honest as Terran Electric."
"Kingman," smiled Channing, "I hate to remind you of this, but who got
what just now? We wanted the transmission tube."
"I see your point. But we have a means of getting power out of the sun."
"We have a hunk of that too. It would probably have been a mere matter
of time before some bright bird at Terran found the thing as it was."
"I shall see that the contract gives you domain over man-made objects in
space—including those that occasionally touch upon the natural celestial
objects. Also the necessary equipment operating under the charter of
Interplanetary Communications, wherever or whenever it may be,
including any future installations."
"Fine."
"You may have trouble understanding our feelings. We are essentially a
space-born company, and as such we can have no one at the helm that is
not equipped to handle the technical details of operation in space."
Channing smiled reminiscently. "We had a so-called efficiency expert
running Venus Equilateral a couple of years ago, and the fool nearly
wrecked us because he didn't know that the airplant was not a mass of
highly complicated, chemical reaction machinery instead of what it really
is. Kingman, do you know what an airplant is?"
"Frankly no. I should imagine it is some sort of air-purifying device."
"You'll sit down hard when I tell you that the airplant is just what it is.
Martian Sawgrass! What better device in the solar system can be used for
air-purifying than a chlorophyll-bearing plant; it takes in carbon dioxide
and gives off oxygen. Brother Burbank tossed it in the incinerator because
he thought it was just weeds, cluttering up the place. He was allergic to
good engineering, anyway."
"That may be good enough in space," said Kingman, "but on Terra, we
feel that our engineers are not equipped to dabble in the legal tangles that
follow when they force us to establish precedent by inventing something
that has never been covered by a previous decision."
"O.K.," said Don. "Every man to his own scope. Write up your contract,
Kingman, and we'll all climb on the bandwagon with our illiterary X's."
In Evanston, North of Chicago, the leaves changed from their riotous
green to a somber brown, and fell to lay a blanket over the earth. Snow
covered the dead leaves, and Christmas, with its holly went into the past,
followed closely by New Year's Eve with its hangover.
And on a roof by the shore of Lake Michigan, a group of men stood in
overcoats beside a huge machine that towered above the great letters of
the Terran Electric Company sign that could be seen all the way from
Gary, Indiana.
It was a beautiful thing, this tube; a far cry from the haywire thing that
had brought solar power to Venus Equilateral. It was mounted on
gymbals, and the metal was bright-plated and perfectly machined. Purring
motors caused the tube to rotate to follow the sun.
"Is she aligned?" asked the project engineer.
"Right on the button."
"Good. We can't miss with this one. There may have been something sour
with the rest, but this one ran Venus Equilateral—the whole Relay Station
—for ten days without interruption."
He faced the anxious men in overcoats. "Here we go," he said, and his
hand closed upon the switch that transferred the big tube from test power
to operating power.
The engineer closed the switch, and stepped over to the great, vaned, air-
cooled ammeter shunt. On a panel just beyond the shunt the meter hung—
At Zero!
"Um," said the project engineer. "Something wrong, no doubt."
They checked every connection, every possible item in the circuit.
"Nothing wrong."
"Oh now look," said the project engineer, "This isn't hell, where the
equipment is always perfect except that it doesn't work."
"This is hell," announced his assistant. "The thing is perfect except that it
doesn't work."
"It worked on Venus Equilateral."
"We've changed nothing, and we handled that gadget like it was made of
cello-gel. We're running the same kind of voltage, checked on Standard
Voltmeters. We're within one tenth of one percent of the original
operating conditions. But—no power."
"Call Channing."
The beams between Terra and Venus Equilateral carried furious messages
for several hours. Channing's answer said: "I'm curious. Am bringing the
experimental ship to Terra to investigate."
The project engineer asked: "Isn't that the job that they hooked up to use
solar power for their drive?"
His assistant said: "That's it. And it worked."
"I know. I took a run on it!"

Channing was taking a chance, running the little Anopheles to Terra, but
he knew his ship, and he was no man to be overcautious. He drove it for
Terra at three G, and by dead reckoning, started down into Terra's blanket
of air, heading for the Terran Electric plant which was situated on the lake
shore.
Then down out of the cloudless sky came the Anopheles in a free fall. It
screamed with the whistle of tortured air as it fell, and it caught the
attention of every man that was working at Terran Electric.
Only those on the roof saw the egg-shaped hull fall out of the sky
unchecked; landing fifteen hundred yards off shore in Lake Michigan.
The splash was terrific.
"Channing—!" said the project engineer, aghast.
"No, look, there—a lifeship!"
Cautiously sliding down, a minute lifeship less than the size of a freight
car came to a landing in the Terran Electric construction yard. Channing
emerged, his face white. He bent down and kissed the steel grille of the
construction yard fervently.
Someone ran out and gave Channing a brown bottle. Don nodded, and
took a draw of monstrous proportions. He gagged, made a face, and
smiled in a very wan manner.
"Thanks," he said shakily. He took another drink, of more gentlemanly
size.
"What happened?"
"Dunno. Was coming in at three G. About four hundred miles up, the
deceleration just quit. Like that! I made it to the skeeter, here, in just
enough time to get her away about two miles ago. Whoosh!"
Don dug into his pocket and found cigarettes. He lit up and drew deeply.
"Something cock-eyed, here. That stoppage might make me think that my
tube failed; but—"
"You suspect that our tube isn't working for the same reason?" finished
the project engineer.
"Yes. I'm thinking of the trick, ultra-high powered, concentric beams we
have to use to ram a hole through the Heaviside Layer. We start out with
three million watts of sheer radio frequency and end up with just enough
to make our receivers worth listening to. Suppose this had some sort of
Heaviside Layer?"
"In which case, Terran Electric hasn't got solar power," said the project
engineer. "Tim, load this bottle into the Electric Lady, and we'll see if we
can find this barrier." To Channing, he said: "You look as though you
could stand a rest. Check into a hotel in Chicago and we'll call you when
we're ready to try it out."
Channing agreed. A shave, a bath, and a good night's sleep did wonders
for his nerves, as did a large amount of Scotch. He was at Terran Electric
in the morning, once more in command of himself.
Up into the sky went the ship that carried the solar tube. It remained inert
until the ship passed above three hundred and forty miles. Then the
ammeter needle swung over, and the huge shunt grew warm. The tenuous
atmosphere outside of the ship was unchanged, yet the beam drew power
of gigantic proportions.
They dropped again. The power ceased.
They spent hours rising and falling, charting this unknown barrier that
stopped the unknown radiation from bringing solar power right down to
earth. It was there, all right, and impervious. Above, megawatts raced
through the giant shunt. Below, not even a micro-ammeter could detect a
trace of current.
"O.K., Don," said the project engineer. "We'll have to do some more work
on it. It's nothing of your doing."
Mark Kingman's face was green again, but he nodded in agreement. "We
seem to have a useless job here, but we'll think of something."
Channing left for Venus Equilateral in two more days. They studied the
barrier and established its height as a constant three hundred and thirty-
nine, point seven six miles above Terra's mythical sea level. It was almost
a perfect sphere, that did not change with the night and day as did the
Heaviside Layer. There was no way to find out how thick it was, but
thickness was of no importance, since it effectively stopped the beam.
And as Don Channing stepped aboard the Princess of the Sky to get home
again, the project engineer said: "If you don't mind, I think we'll call that
one the Channing Layer!"
"Yeah," grinned Don, pleased at the thought, "and forever afterward it
will stand as a cinder in the eye of Terran Electric."
"Oh," said the project engineer, "We'll beat the Channing Layer."
The project engineer was a bum prophet—
THE END.
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