Question 1

Money and wealth are the same thing.

Accepted Answer

A) True 
 B)False  False

Question 2

The South African Reserve Bank is the central bank of South Africa and its Monetary Policy Committee comprises members appointed by the Bank and by the Minister of Finance.

Accepted Answer

A) True 
 B)False  True

Question 3

Which one of the following is not included in the M1 money stock?

Accepted Answer

A) Deposits with maturity up to two years. 
B) Overnight deposits. 
C) Currency in circulation. 
D) None of the above - they are all included in M1. 
A) Deposits with maturity up to two years. 
B) Overnight deposits. 
C) Currency in circulation. 
D) None of the above - they are all included in M1. A

Question 4

What is the difference between commodity money and fiat money? Why do people accept fiat money in trade for goods and services?

Accepted Answer

Commodity money has "intrinsic value," o

Question 5

Commodity money has value independent of its use as money.

Accepted Answer

A) True 
 B)False

Question 6

Refiloe won a lottery prize of r₁ million.She put the money in the bank to save it for her daughter's university education.For Refiloe, money was functioning primarily as a

Accepted Answer

A) unit of account. 
B) store of value. 
C) means of payment. 
D) type of short term loan. 
A) unit of account. 
B) store of value. 
C) means of payment. 
D) type of short term loan.

Question 7

Which of the following statements is NOT true?

Accepted Answer

A) The purchase of government bonds from the public increases the money supply. 
B) Monetary policy in the SA is set by the Monetary Policy Committee of the South African Reserve bank. 
C) When the central bank sells government bonds to the public, the money supply decreases. 
D) Monetary policy in SA is set by the Minister of Finance in consultation with the South African Reserve Bank 
A) The purchase of government bonds from the public increases the money supply. 
B) Monetary policy in the SA is set by the Monetary Policy Committee of the South African Reserve bank. 
C) When the central bank sells government bonds to the public, the money supply decreases. 
D) Monetary policy in SA is set by the Minister of Finance in consultation with the South African Reserve Bank

Question 8

In order for something to function well as a medium of exchange, it must be

Accepted Answer

A) issued by a central government. 
B) readily and widely accepted in trade. 
C) backed by a valuable commodity. 
D) All of the above are correct. 
A) issued by a central government. 
B) readily and widely accepted in trade. 
C) backed by a valuable commodity. 
D) All of the above are correct.

Question 9

Commodity money

Accepted Answer

A) has no intrinsic value. 
B) has intrinsic value. 
C) is used exclusively in the economies of western Europe and North America. 
D) is used as reserves to back fiat money. 
A) has no intrinsic value. 
B) has intrinsic value. 
C) is used exclusively in the economies of western Europe and North America. 
D) is used as reserves to back fiat money.

Question 10

A central bank is designed to regulate the quantity of money made available in the economy.This is called the

Accepted Answer

A) money supply. 
B) gold standard. 
C) stock assets. 
D) bonds. 
A) money supply. 
B) gold standard. 
C) stock assets. 
D) bonds.

Question 11

Which one of the following statements is NOT correct?

Accepted Answer

A) A repurchase agreement is the sale of a non-monetary asset together with an agreement to repurchase it a specified future date. 
B) The difference between the price at which a commercial bank sells an asset to the central bank and the price at which it agrees to buy it back can be expressed as an annualized percentage of the selling price, and this is called the refinancing rate. 
C) In SA the refinancing rate is known as the repo rate. 
D) If the central bank raises its refinancing rate then the commercial banks will try to increase their lending. 
A) A repurchase agreement is the sale of a non-monetary asset together with an agreement to repurchase it a specified future date. 
B) The difference between the price at which a commercial bank sells an asset to the central bank and the price at which it agrees to buy it back can be expressed as an annualized percentage of the selling price, and this is called the refinancing rate. 
C) In SA the refinancing rate is known as the repo rate. 
D) If the central bank raises its refinancing rate then the commercial banks will try to increase their lending.

Question 12

Wealth held in ______________ is almost as convenient for buying things as wealth held as cash.

Accepted Answer

A) savings accounts 
B) stock options 
C) trading accounts 
D) current bank accounts 
A) savings accounts 
B) stock options 
C) trading accounts 
D) current bank accounts

Question 13

What is the name of the policy designed to limit the risks across the financial sector by focusing on improving 'prudential' standards of operation that enhance stability and reduce risk?

Accepted Answer

A) Governance. 
B) Compliance. 
C) Systemic policy. 
D) Macroprudential policy. 
A) Governance. 
B) Compliance. 
C) Systemic policy. 
D) Macroprudential policy.

Question 14

The primary objective of the _______________ is to promote price stability throughout the euro area and to design and implement monetary policy that is consistent with this objective.

Accepted Answer

A) SA Parliament 
B) Competition Commission of SA 
C) South African Reserve Bank 
D) African National Congress 
A) SA Parliament 
B) Competition Commission of SA 
C) South African Reserve Bank 
D) African National Congress

Question 15

Are credit cards and debit cards money? What is the difference between credit cards and debit cards?

Accepted Answer

Neither credit cards nor debit cards are

Question 16

A ________________ risk can occur when a bank cannot fund demand for withdrawals.

Accepted Answer

A) savings 
B) liquidity 
C) depositor 
D) systemic 
A) savings 
B) liquidity 
C) depositor 
D) systemic

Question 17

A bank's balance sheet consists of its

Accepted Answer

A) assets and liabilities. 
B) cash and deposits. 
C) savings. 
D) liquidity. 
A) assets and liabilities. 
B) cash and deposits. 
C) savings. 
D) liquidity.

Question 18

You use rands to pay the owner of a restaurant for a delicious meal.The rand currency

Accepted Answer

A) has no intrinsic value.The exchange is an example of barter. 
B) has no intrinsic value.The exchange is not an example of barter. 
C) has intrinsic value.The exchange is not an example of barter. 
D) has intrinsic value.The exchange is an example of barter. 
A) has no intrinsic value.The exchange is an example of barter. 
B) has no intrinsic value.The exchange is not an example of barter. 
C) has intrinsic value.The exchange is not an example of barter. 
D) has intrinsic value.The exchange is an example of barter.

Question 19

Which of the following statements about money is not true?

Accepted Answer

A) A debit card is not really money because it is only a means of transferring money between accounts. 
B) All the wealth that people hold, in whatever form, should be considered as money. 
C) Wealth held in the current account you hold with your bank is almost as convenient for buying things as wealth held in your wallet, so the wealth in current accounts should be included in measures of money. 
D) In a complex economy, it is not easy to draw a clear dividing line between assets that should be considered as money and those that should not. 
A) A debit card is not really money because it is only a means of transferring money between accounts. 
B) All the wealth that people hold, in whatever form, should be considered as money. 
C) Wealth held in the current account you hold with your bank is almost as convenient for buying things as wealth held in your wallet, so the wealth in current accounts should be included in measures of money. 
D) In a complex economy, it is not easy to draw a clear dividing line between assets that should be considered as money and those that should not.

Question 20

If an economy's inflation rate is above target, the central bank would be most likely to

Accepted Answer

A) encourage banks to provide loans by lowering the repo rate. 
B) encourage banks to provide loans by raising the repo rate. 
C) restrict bank lending by lowering the repo rate. 
D) restrict bank lending by raising the repo rate. 
A) encourage banks to provide loans by lowering the repo rate. 
B) encourage banks to provide loans by raising the repo rate. 
C) restrict bank lending by lowering the repo rate. 
D) restrict bank lending by raising the repo rate.

Money and wealth are the same thing.

The South African Reserve Bank is the central bank of South Africa and its Monetary Policy Committee comprises members appointed by the Bank and by the Minister of Finance.

Which one of the following is not included in the M1 money stock?

What is the difference between commodity money and fiat money? Why do people accept fiat money in trade for goods and services?

Commodity money has value independent of its use as money.

Refiloe won a lottery prize of r₁ million.She put the money in the bank to save it for her daughter's university education.For Refiloe, money was functioning primarily as a

Which of the following statements is NOT true?

In order for something to function well as a medium of exchange, it must be

Commodity money

A central bank is designed to regulate the quantity of money made available in the economy.This is called the

Which one of the following statements is NOT correct?

Wealth held in ______________ is almost as convenient for buying things as wealth held as cash.

What is the name of the policy designed to limit the risks across the financial sector by focusing on improving 'prudential' standards of operation that enhance stability and reduce risk?

The primary objective of the _______________ is to promote price stability throughout the euro area and to design and implement monetary policy that is consistent with this objective.

Are credit cards and debit cards money? What is the difference between credit cards and debit cards?

A ________________ risk can occur when a bank cannot fund demand for withdrawals.

A bank's balance sheet consists of its

You use rands to pay the owner of a restaurant for a delicious meal.The rand currency

Which of the following statements about money is not true?

If an economy's inflation rate is above target, the central bank would be most likely to

What Is Economics

Thinking Like an Economist

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters

Exam 9: The Monetary System

Money and wealth are the same thing.

The South African Reserve Bank is the central bank of South Africa and its Monetary Policy Committee comprises members appointed by the Bank and by the Minister of Finance.

Which one of the following is not included in the M1 money stock?

What is the difference between commodity money and fiat money? Why do people accept fiat money in trade for goods and services?

Commodity money has value independent of its use as money.

Refiloe won a lottery prize of r₁ million.She put the money in the bank to save it for her daughter's university education.For Refiloe, money was functioning primarily as a

Which of the following statements is NOT true?

In order for something to function well as a medium of exchange, it must be

Commodity money

A central bank is designed to regulate the quantity of money made available in the economy.This is called the

Which one of the following statements is NOT correct?

Wealth held in ______________ is almost as convenient for buying things as wealth held as cash.

What is the name of the policy designed to limit the risks across the financial sector by focusing on improving 'prudential' standards of operation that enhance stability and reduce risk?

The primary objective of the _______________ is to promote price stability throughout the euro area and to design and implement monetary policy that is consistent with this objective.

Are credit cards and debit cards money? What is the difference between credit cards and debit cards?

A ________________ risk can occur when a bank cannot fund demand for withdrawals.

A bank's balance sheet consists of its

You use rands to pay the owner of a restaurant for a delicious meal.The rand currency

Which of the following statements about money is not true?

If an economy's inflation rate is above target, the central bank would be most likely to

What Is Economics

Thinking Like an Economist

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters