Question 1

The biggest problem with credit money is

Accepted Answer

A)  its weight-to-value ratio. 
B)  elasticity of supply. 
C)  default risk. 
D)  none of the above. 
A)  its weight-to-value ratio. 
B)  elasticity of supply. 
C)  default risk. 
D)  none of the above.

Question 2

How would the introduction of automatic transfer accounts have affected the money supply?

Accepted Answer

The supply of money would incr

Question 3

Money is

Accepted Answer

A)  anything that acts as a store of value. 
B)  a divisible good that can be traded with many people. 
C)  anything generally accepted for trade. 
D)  all of the above. 
A)  anything that acts as a store of value. 
B)  a divisible good that can be traded with many people. 
C)  anything generally accepted for trade. 
D)  all of the above.

Question 4

A disadvantage of credit money is

Accepted Answer

A)  elasticity of supply. 
B)  weight to value ratio 
C)  indivisibility. 
D)  none of the above. 
A)  elasticity of supply. 
B)  weight to value ratio 
C)  indivisibility. 
D)  none of the above.

Question 5

Which type of money is the most difficult to counterfeit?

Accepted Answer

A)  fiat 
B)  commodity 
C)  representative 
D)  credit 
A)  fiat 
B)  commodity 
C)  representative 
D)  credit

Question 6

What are the advantages of representative money?

Accepted Answer

Representative money is easy a

Question 7

Which of the following is part of any measure of the money supply?

Accepted Answer

A)  cash 
B)  mutual funds 
C)  bank reserves 
D)  commercial loans 
A)  cash 
B)  mutual funds 
C)  bank reserves 
D)  commercial loans

Question 8

Representative, fiat, and credit monies are more efficient than commodity money.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not an example of commodity money?

Accepted Answer

A)  tobacco 
B)  gold 
C)  clamshells 
D)  all of the above 
A)  tobacco 
B)  gold 
C)  clamshells 
D)  all of the above

Question 10

Which of the following is/are desirable attributes of a medium of exchange?

Accepted Answer

A)  durability 
B)  elasticity of supply 
C)  divisibility 
D)  all of the above 
A)  durability 
B)  elasticity of supply 
C)  divisibility 
D)  all of the above

Question 11

Under credit money, prices automatically fall in a recession.

Accepted Answer

A) True 
 B)False

Question 12

Credit money has inelastic supply.

Accepted Answer

A) True 
 B)False

Question 13

An increase in bank lending decreases the money supply.

Accepted Answer

A) True 
 B)False

Question 14

Money is the only asset that acts as a

Accepted Answer

A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  all of the above. 
A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  all of the above.

Question 15

When money is used to compare the relative value of goods, it is functioning as a

Accepted Answer

A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  all of the above. 
A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  all of the above.

Question 16

If a fiat money becomes easier to produce, prices denominated in that money will (ceteris paribus)

Accepted Answer

A)  rise. 
B)  fall. 
C)  stay the same. 
D)  cannot be determined. 
A)  rise. 
B)  fall. 
C)  stay the same. 
D)  cannot be determined.

Question 17

Which of the following types of money are not self-equilibrating?

Accepted Answer

A)  commodity 
B)  representative 
C)  fiat 
D)  all are self-equilibrating 
A)  commodity 
B)  representative 
C)  fiat 
D)  all are self-equilibrating

Question 18

If a commodity money becomes easier to find or produce, prices denominated in that money will (ceteris paribus)

Accepted Answer

A)  rise. 
B)  fall. 
C)  stay the same. 
D)  cannot be determined. 
A)  rise. 
B)  fall. 
C)  stay the same. 
D)  cannot be determined.

Question 19

As measures of the money supply, M2 is more liquid than M3.

Accepted Answer

A) True 
 B)False

Question 20

What is fractional reserve banking?

Accepted Answer

Fractional reserve banking mea

Exam 3: Money

The biggest problem with credit money is

How would the introduction of automatic transfer accounts have affected the money supply?

Money is

A disadvantage of credit money is

Which type of money is the most difficult to counterfeit?

What are the advantages of representative money?

Which of the following is part of any measure of the money supply?

Representative, fiat, and credit monies are more efficient than commodity money.

Which of the following is not an example of commodity money?

Which of the following is/are desirable attributes of a medium of exchange?

Under credit money, prices automatically fall in a recession.

Credit money has inelastic supply.

An increase in bank lending decreases the money supply.

Money is the only asset that acts as a

When money is used to compare the relative value of goods, it is functioning as a

If a fiat money becomes easier to produce, prices denominated in that money will (ceteris paribus)

Which of the following types of money are not self-equilibrating?

If a commodity money becomes easier to find or produce, prices denominated in that money will (ceteris paribus)

As measures of the money supply, M2 is more liquid than M3.

What is fractional reserve banking?

The Financial System

Interest Rates

The Economics of Interest-Rate Fluctuations

The Economics of Interest-Rate Spreads and Yield Curves

Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities

Financial Structure, Transaction Costs, and Asymmetric Information

Bank Management

Innovation and Structure in Banking and Finance

The Economics of Financial Regulation

Financial Derivatives

Financial Crises: Causes and Consequences

Central Bank Form and Function

The Money Supply Process and the Money Multipliers

Monetary Policy Tools

Monetary Policy Targets and Goals

Foreign Exchange

International Monetary Regimes

Money Demand

Is-Lm

Is-Lm in Action

Aggregate Supply and Demand and the Growth Diamond

Monetary Policy Transmission Mechanisms

Inflation and Money

Rational Expectations Redux: Monetary Policy Implications

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