Question 1

Which of the following is not included in the M1 measure of money but is included in the M2 measure of money?

Accepted Answer

A) Currency 
B) Traveler's checks 
C) Demand deposits 
D) Small-denomination time deposits 
A) Currency 
B) Traveler's checks 
C) Demand deposits 
D) Small-denomination time deposits

Question 2

Monetary aggregates are

Accepted Answer

A) measures of the money supply reported by the Federal Reserve. 
B) measures of the wealth of individuals. 
C) never redefined since "money" never changes. 
D) reported by the Treasury Department annually. 
A) measures of the money supply reported by the Federal Reserve. 
B) measures of the wealth of individuals. 
C) never redefined since "money" never changes. 
D) reported by the Treasury Department annually.

Question 3

The M1 measure of money includes

Accepted Answer

A) small denomination time deposits. 
B) traveler's checks. 
C) money market deposit accounts. 
D) money market mutual fund shares. 
A) small denomination time deposits. 
B) traveler's checks. 
C) money market deposit accounts. 
D) money market mutual fund shares.

Question 4

People hold money even during inflationary episodes when other assets prove to be better stores of value.This can be explained by the fact that money is

Accepted Answer

A) extremely liquid. 
B) a unique good for which there are no substitutes. 
C) the only thing accepted in economic exchange. 
D) backed by gold. 
A) extremely liquid. 
B) a unique good for which there are no substitutes. 
C) the only thing accepted in economic exchange. 
D) backed by gold.

Question 5

Of money's three functions,the one that distinguishes money from other assets is its function as a

Accepted Answer

A) store of value. 
B) unit of account. 
C) standard of deferred payment. 
D) medium of exchange. 
A) store of value. 
B) unit of account. 
C) standard of deferred payment. 
D) medium of exchange.

Question 6

The payments system is

Accepted Answer

A) the method of conducting transactions in the economy. 
B) used by union officials to set salary caps. 
C) an illegal method of rewarding contracts. 
D) used by your employer to determine salary increases. 
A) the method of conducting transactions in the economy. 
B) used by union officials to set salary caps. 
C) an illegal method of rewarding contracts. 
D) used by your employer to determine salary increases.

Question 7

Defining money becomes ________ difficult as the pace of financial innovation ________.

Accepted Answer

A) less; quickens 
B) more; quickens 
C) more; slows 
D) more; stops 
A) less; quickens 
B) more; quickens 
C) more; slows 
D) more; stops

Question 8

Which of the following is not included in the measure of M1?

Accepted Answer

A) NOW accounts 
B) Demand deposits 
C) Currency 
D) Savings deposits 
A) NOW accounts 
B) Demand deposits 
C) Currency 
D) Savings deposits

Question 9

Increasing transactions costs of selling an asset make the asset

Accepted Answer

A) more valuable. 
B) more liquid. 
C) less liquid. 
D) more moneylike. 
A) more valuable. 
B) more liquid. 
C) less liquid. 
D) more moneylike.

Question 10

The total collection of pieces of property that serve to store value is a person's

Accepted Answer

A) wealth. 
B) income. 
C) money. 
D) credit. 
A) wealth. 
B) income. 
C) money. 
D) credit.

Question 11

If an individual moves money from currency to a demand deposit account,

Accepted Answer

A) M1 decreases and M2 stays the same. 
B) M1 stays the same and M2 increases. 
C) M1 stays the same and M2 stays the same. 
D) M1 increases and M2 stays the same. 
A) M1 decreases and M2 stays the same. 
B) M1 stays the same and M2 increases. 
C) M1 stays the same and M2 stays the same. 
D) M1 increases and M2 stays the same.

Question 12

The conversion of a barter economy to one that uses money

Accepted Answer

A) increases efficiency by reducing the need to exchange goods and services. 
B) increases efficiency by reducing the need to specialize. 
C) increases efficiency by reducing transactions costs. 
D) does not increase economic efficiency. 
A) increases efficiency by reducing the need to exchange goods and services. 
B) increases efficiency by reducing the need to specialize. 
C) increases efficiency by reducing transactions costs. 
D) does not increase economic efficiency.

Question 13

If peanuts serve as a medium of exchange,a unit of account,and a store of value,then peanuts are

Accepted Answer

A) bank deposits. 
B) reserves. 
C) money. 
D) loanable funds. 
A) bank deposits. 
B) reserves. 
C) money. 
D) loanable funds.

Question 14

________ are the time and resources spent trying to exchange goods and services.

Accepted Answer

A) Bargaining costs. 
B) Transaction costs. 
C) Contracting costs. 
D) Barter costs. 
A) Bargaining costs. 
B) Transaction costs. 
C) Contracting costs. 
D) Barter costs.

Which of the following is not included in the M1 measure of money but is included in the M2 measure of money?

Monetary aggregates are

The M1 measure of money includes

People hold money even during inflationary episodes when other assets prove to be better stores of value.This can be explained by the fact that money is

Of money's three functions,the one that distinguishes money from other assets is its function as a

The payments system is

Defining money becomes difficult as the pace of financial innovation .

Which of the following is not included in the measure of M1?

Increasing transactions costs of selling an asset make the asset

The total collection of pieces of property that serve to store value is a person's

If an individual moves money from currency to a demand deposit account,

The conversion of a barter economy to one that uses money

If peanuts serve as a medium of exchange,a unit of account,and a store of value,then peanuts are

________ are the time and resources spent trying to exchange goods and services.

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

Understanding Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory,inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

The ISLM Model

Filters

Exam 3: What Is Money

Which of the following is not included in the M1 measure of money but is included in the M2 measure of money?

Monetary aggregates are

The M1 measure of money includes

People hold money even during inflationary episodes when other assets prove to be better stores of value.This can be explained by the fact that money is

Of money's three functions,the one that distinguishes money from other assets is its function as a

The payments system is

Defining money becomes ________ difficult as the pace of financial innovation ________.

Which of the following is not included in the measure of M1?

Increasing transactions costs of selling an asset make the asset

The total collection of pieces of property that serve to store value is a person's

If an individual moves money from currency to a demand deposit account,

The conversion of a barter economy to one that uses money

If peanuts serve as a medium of exchange,a unit of account,and a store of value,then peanuts are

________ are the time and resources spent trying to exchange goods and services.

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

Understanding Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory,inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

The ISLM Model

Filters

Defining money becomes difficult as the pace of financial innovation .