Question 1

Macroeconomists call assets used to make transactions:

Accepted Answer

A) real income. 
B) nominal income. 
C) money. 
D) consumption. 
A) real income. 
B) nominal income. 
C) money. 
D) consumption. C

Question 2

The use of fei as money on the island of Yap illustrates the idea of money as a social convention because:

Accepted Answer

A) only fei physically in the possession of the owner is accepted in transactions. 
B) legal claim to a fei never seen by current generations was accepted in transactions. 
C) the central bank of Yap accepts fei in exchange for paper certificates. 
D) the government of Yap verifies the authenticity of fei used for transactions. 
A) only fei physically in the possession of the owner is accepted in transactions. 
B) legal claim to a fei never seen by current generations was accepted in transactions. 
C) the central bank of Yap accepts fei in exchange for paper certificates. 
D) the government of Yap verifies the authenticity of fei used for transactions. B

Question 3

Credit cards:

Accepted Answer

A) are part of the M₁ money supply. 
B) are part of the M₂ money supply. 
C) are part of both the M₁ and M₂ money 
D) supply. may affect the demand for money. 
A) are part of the M₁ money supply. 
B) are part of the M₂ money supply. 
C) are part of both the M₁ and M₂ money 
D) supply. may affect the demand for money. D

Question 4

To reduce the money supply, the Federal Reserve:

Accepted Answer

A) buys government bonds. 
B) sells government bonds. 
C) creates demand deposits. 
D) destroys demand deposits. 
A) buys government bonds. 
B) sells government bonds. 
C) creates demand deposits. 
D) destroys demand deposits.

Question 5

The quantity of money in the United States is essentially controlled by the:

Accepted Answer

A) President of the United States. 
B) Department of the Treasury. 
C) Federal Reserve. 
D) system of commercial banks. 
A) President of the United States. 
B) Department of the Treasury. 
C) Federal Reserve. 
D) system of commercial banks.

Question 6

All of the following assets are included in M₁ except:

Accepted Answer

A) currency. 
B) demand deposits. 
C) traveler's checks. 
D) money market deposit accounts. 
A) currency. 
B) demand deposits. 
C) traveler's checks. 
D) money market deposit accounts.

Question 7

The central bank in the United States is the:

Accepted Answer

A) Bank of America. 
B) U.S. Treasury. 
C) U.S. National Bank. 
D) Federal Reserve. 
A) Bank of America. 
B) U.S. Treasury. 
C) U.S. National Bank. 
D) Federal Reserve.

Question 8

An important factor in the evolution of commodity money to fiat money is:

Accepted Answer

A) a desire to reduce transaction costs. 
B) a desire to increase transaction costs. 
C) the fact that gold is no longer highly 
D) valued. a desire to use gold for jewelry. 
A) a desire to reduce transaction costs. 
B) a desire to increase transaction costs. 
C) the fact that gold is no longer highly 
D) valued. a desire to use gold for jewelry.

Question 9

Demand deposits are funds held in:

Accepted Answer

A) currency. 
B) certificates of deposit. 
C) checking accounts. 
D) money markets. 
A) currency. 
B) certificates of deposit. 
C) checking accounts. 
D) money markets.

Question 10

To increase the money supply, the Federal Reserve:

Accepted Answer

A) buys government bonds. 
B) sells government bonds. 
C) buys corporate stocks. 
D) sells corporate stocks. 
A) buys government bonds. 
B) sells government bonds. 
C) buys corporate stocks. 
D) sells corporate stocks.

Question 11

Currency equals:

Accepted Answer

A) M₁. 
B) the sum of funds in checking accounts. 
C) the sum of checking accounts and paper money. 
D) the sum of coins and paper money. 
A) M₁. 
B) the sum of funds in checking accounts. 
C) the sum of checking accounts and paper money. 
D) the sum of coins and paper money.

Question 12

In the United States, monetary policy is controlled by:

Accepted Answer

A) the President. 
B) the Congress. 
C) the Federal Reserve. 
D) the Treasury Department. 
A) the President. 
B) the Congress. 
C) the Federal Reserve. 
D) the Treasury Department.

Question 13

Money's liquidity refers to the ease with which:

Accepted Answer

A) coins can be melted down. 
B) illegally obtained money can be laundered. 
C) loans can be floated. 
D) money can be converted into goods and services. 
A) coins can be melted down. 
B) illegally obtained money can be laundered. 
C) loans can be floated. 
D) money can be converted into goods and services.

Question 14

In a 100-percent-reserve banking system, banks:

Accepted Answer

A) can increase the money supply. 
B) can decrease the money supply. 
C) can either increase or decrease the money supply. 
D) cannot affect the money supply. 
A) can increase the money supply. 
B) can decrease the money supply. 
C) can either increase or decrease the money supply. 
D) cannot affect the money supply.

Question 15

Credit card balances are included in:

Accepted Answer

A) M₁ only. 
B) M₂ only. 
C) both M₁ and M₂. 
D) neither M₁ nor M₂. 
A) M₁ only. 
B) M₂ only. 
C) both M₁ and M₂. 
D) neither M₁ nor M₂.

Question 16

Money that has no value other than as money is called money.

Accepted Answer

A) fiat 
B) intrinsic 
C) commodity 
D) government 
A) fiat 
B) intrinsic 
C) commodity 
D) government

Question 17

When a pizza maker lists the price of a pizza as $10, this is an example of using money as a:

Accepted Answer

A) store of value. 
B) unit of account. 
C) medium of exchange. 
D) flow of value. 
A) store of value. 
B) unit of account. 
C) medium of exchange. 
D) flow of value.

Question 18

In prisoner of war camps during World War II, the "currency" used was:

Accepted Answer

A) chocolates. 
B) cigarettes. 
C) gold. 
D) IOUs. 
A) chocolates. 
B) cigarettes. 
C) gold. 
D) IOUs.

Question 19

People use money as a medium of exchange when they:

Accepted Answer

A) hold money to transfer purchasing power into the future. 
B) use money as a measure of economic transactions. 
A) hold money to transfer purchasing power into the future. 
B) use money as a measure of economic transactions.

Question 20

People use money as a unit of account when they:

Accepted Answer

A) hold money to transfer purchasing power into the future. 
B) use money as a measure of economic transactions. 
C) use money to buy goods and services. 
D) hold money to gain power and esteem. 
A) hold money to transfer purchasing power into the future. 
B) use money as a measure of economic transactions. 
C) use money to buy goods and services. 
D) hold money to gain power and esteem.

Macroeconomists call assets used to make transactions:

The use of fei as money on the island of Yap illustrates the idea of money as a social convention because:

Credit cards:

To reduce the money supply, the Federal Reserve:

The quantity of money in the United States is essentially controlled by the:

All of the following assets are included in M₁ except:

The central bank in the United States is the:

An important factor in the evolution of commodity money to fiat money is:

Demand deposits are funds held in:

To increase the money supply, the Federal Reserve:

Currency equals:

In the United States, monetary policy is controlled by:

Money's liquidity refers to the ease with which:

In a 100-percent-reserve banking system, banks:

Credit card balances are included in:

Money that has no value other than as money is called money.

When a pizza maker lists the price of a pizza as $10, this is an example of using money as a:

In prisoner of war camps during World War II, the "currency" used was:

People use money as a medium of exchange when they:

People use money as a unit of account when they:

The Science of Macroeconomics

The Data of Macroeconomics

National Income Where It Comes From and Where It Goes

The Open Economy

Unemployment

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand II: Applying the Is-Lm Model

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

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Exam 4: Money and Inflation

Macroeconomists call assets used to make transactions:

The use of fei as money on the island of Yap illustrates the idea of money as a social convention because:

Credit cards:

To reduce the money supply, the Federal Reserve:

The quantity of money in the United States is essentially controlled by the:

All of the following assets are included in M₁ except:

The central bank in the United States is the:

An important factor in the evolution of commodity money to fiat money is:

Demand deposits are funds held in:

To increase the money supply, the Federal Reserve:

Currency equals:

In the United States, monetary policy is controlled by:

Money's liquidity refers to the ease with which:

In a 100-percent-reserve banking system, banks:

Credit card balances are included in:

Money that has no value other than as money is called money.

When a pizza maker lists the price of a pizza as $10, this is an example of using money as a:

In prisoner of war camps during World War II, the "currency" used was:

People use money as a medium of exchange when they:

People use money as a unit of account when they:

The Science of Macroeconomics

The Data of Macroeconomics

National Income Where It Comes From and Where It Goes

The Open Economy

Unemployment

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand II: Applying the Is-Lm Model

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

Filters