Question 1

Credit cards are

Accepted Answer

A) included in M2 but not in M1. 
B) not considered to be money. 
C) included in M3 but not in M2 or M1. 
D) considered as money only when they are in the hands of the public. 
A) included in M2 but not in M1. 
B) not considered to be money. 
C) included in M3 but not in M2 or M1. 
D) considered as money only when they are in the hands of the public.

Question 2

A bank run is said to have occurred when

Accepted Answer

A) depositors realise that a particular bank is paying higher interest than its competitors and a substantial number of them rush to deposit their money in it. 
B) a substantial number of depositors suspect that a bank may go bankrupt and withdraw their deposits. 
C) a bank experiences a series of defaults on its loans. 
D) a bank converts its loans into deposits. 
A) depositors realise that a particular bank is paying higher interest than its competitors and a substantial number of them rush to deposit their money in it. 
B) a substantial number of depositors suspect that a bank may go bankrupt and withdraw their deposits. 
C) a bank experiences a series of defaults on its loans. 
D) a bank converts its loans into deposits.

Question 3

After the 2007-09 global financial crisis, many central banks adopted macroprudential policies.Why?

Accepted Answer

One of the criticisms of central banks d

Question 4

Money

Accepted Answer

A) is a perfect store of value. 
B) is the most liquid asset. 
C) has intrinsic value, regardless of which form it takes. 
D) All of the above are correct. 
A) is a perfect store of value. 
B) is the most liquid asset. 
C) has intrinsic value, regardless of which form it takes. 
D) All of the above are correct.

Question 5

The three main tools of monetary policy are

Accepted Answer

A) fiat, commodity, and deposit money. 
B) open market operations, reserve requirements, and the refinancing rate. 
C) the money supply, government purchases, and taxation. 
D) government expenditures, taxation, and reserve requirements. 
E) coin, currency, and demand deposits. 
A) fiat, commodity, and deposit money. 
B) open market operations, reserve requirements, and the refinancing rate. 
C) the money supply, government purchases, and taxation. 
D) government expenditures, taxation, and reserve requirements. 
E) coin, currency, and demand deposits.

Question 6

A double coincidence of wants

Accepted Answer

A) is required when there is no item in an economy that is widely accepted in exchange for goods and services. 
B) is required in an economy that relies on barter. 
C) is a hindrance to the allocation of resources when it is required for trade. 
D) All of the above are correct. 
A) is required when there is no item in an economy that is widely accepted in exchange for goods and services. 
B) is required in an economy that relies on barter. 
C) is a hindrance to the allocation of resources when it is required for trade. 
D) All of the above are correct.

Question 7

A credit risk is the risk a bank faces in defaults on

Accepted Answer

A) savings accounts. 
B) loans. 
C) client loss. 
D) trade deficits. 
A) savings accounts. 
B) loans. 
C) client loss. 
D) trade deficits.

Question 8

Which of the following is not a function of money?

Accepted Answer

A) Hedge against inflation. 
B) Medium of exchange. 
C) Unit of account. 
D) Store of value. 
A) Hedge against inflation. 
B) Medium of exchange. 
C) Unit of account. 
D) Store of value.

Question 9

What is the difference between the average interest banks earn on assets and the average interest rate paid on liabilities?

Accepted Answer

A) Spread. 
B) Loss. 
C) Gain. 
D) Change. 
A) Spread. 
B) Loss. 
C) Gain. 
D) Change.

Question 10

The quantity of money circulating in the economy is called the

Accepted Answer

A) fiat reserves. 
B) money stock. 
C) gold reserve. 
D) silver reserve. 
A) fiat reserves. 
B) money stock. 
C) gold reserve. 
D) silver reserve.

Question 11

Barter exchange tends to be inefficient because

Accepted Answer

A) gold is difficult to transport. 
B) it limits the time and effort required for trade. 
C) it can be time consuming to find a double coincidence of wants. 
D) a standardized unit of value can be difficult to find in a primitive economy. 
A) gold is difficult to transport. 
B) it limits the time and effort required for trade. 
C) it can be time consuming to find a double coincidence of wants. 
D) a standardized unit of value can be difficult to find in a primitive economy.

Question 12

An example of fiat money is

Accepted Answer

A) paper euros. 
B) gold. 
C) silver coins. 
D) cigarettes. 
A) paper euros. 
B) gold. 
C) silver coins. 
D) cigarettes.

Question 13

The repo rate is the interest rate

Accepted Answer

A) at which commercial banks lend to and borrow from each other. 
B) the South African Reserve Bank pays on reserves. 
C) the public pays when borrowing from banks. 
D) the South African Reserve Bank charges on loans to banks. 
E) banks pay on the public's deposits. 
A) at which commercial banks lend to and borrow from each other. 
B) the South African Reserve Bank pays on reserves. 
C) the public pays when borrowing from banks. 
D) the South African Reserve Bank charges on loans to banks. 
E) banks pay on the public's deposits.

Question 14

A central bank's open market operations represent the purchase and sale of ______________ to and from the banking sector.

Accepted Answer

A) the money supply 
B) non-monetary assets 
C) cash holdings 
D) savings 
A) the money supply 
B) non-monetary assets 
C) cash holdings 
D) savings

Question 15

When you are willing to go to sleep tonight with r₁00 in your wallet and you have complete confidence that you can spend it tomorrow and receive the same amount of goods as you would have received had you spent it today, money has demonstrated its function as a medium of exchange.

Accepted Answer

A) True 
 B)False

Question 16

If there is 100 per cent reserve banking, the money supply is unaffected by the proportion of its money that the public chooses to hold as currency rather than as bank deposits.

Accepted Answer

A) True 
 B)False

Question 17

Economists argue that the move from barter to money increased trade and production.How is this possible?

Accepted Answer

The use of money allows people

Question 18

Which of the following would NOT be used by a central bank to influence interest rates in the economy?

Accepted Answer

A) Selling government bonds. 
B) Buying shares. 
C) Setting reserve requirements. 
D) Changing the refinancing rate. 
A) Selling government bonds. 
B) Buying shares. 
C) Setting reserve requirements. 
D) Changing the refinancing rate.

Question 19

What are open market operations and in which circumstances are they performed?

Accepted Answer

Open market operations are the purchase

Question 20

The set of actions taken by the central bank in order to affect the money supply is known as

Accepted Answer

A) banking functions. 
B) procedures. 
C) negotiated policies. 
D) monetary policy. 
A) banking functions. 
B) procedures. 
C) negotiated policies. 
D) monetary policy.

Credit cards are

A bank run is said to have occurred when

After the 2007-09 global financial crisis, many central banks adopted macroprudential policies.Why?

Money

The three main tools of monetary policy are

A double coincidence of wants

A credit risk is the risk a bank faces in defaults on

Which of the following is not a function of money?

What is the difference between the average interest banks earn on assets and the average interest rate paid on liabilities?

The quantity of money circulating in the economy is called the

Barter exchange tends to be inefficient because

An example of fiat money is

The repo rate is the interest rate

A central bank's open market operations represent the purchase and sale of ______________ to and from the banking sector.

When you are willing to go to sleep tonight with r₁00 in your wallet and you have complete confidence that you can spend it tomorrow and receive the same amount of goods as you would have received had you spent it today, money has demonstrated its function as a medium of exchange.

If there is 100 per cent reserve banking, the money supply is unaffected by the proportion of its money that the public chooses to hold as currency rather than as bank deposits.

Economists argue that the move from barter to money increased trade and production.How is this possible?

Which of the following would NOT be used by a central bank to influence interest rates in the economy?

What are open market operations and in which circumstances are they performed?

The set of actions taken by the central bank in order to affect the money supply is known as

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

Credit cards are

A bank run is said to have occurred when

After the 2007-09 global financial crisis, many central banks adopted macroprudential policies.Why?

Money

The three main tools of monetary policy are

A double coincidence of wants

A credit risk is the risk a bank faces in defaults on

Which of the following is not a function of money?

What is the difference between the average interest banks earn on assets and the average interest rate paid on liabilities?

The quantity of money circulating in the economy is called the

Barter exchange tends to be inefficient because

An example of fiat money is

The repo rate is the interest rate

A central bank's open market operations represent the purchase and sale of ______________ to and from the banking sector.

When you are willing to go to sleep tonight with r₁00 in your wallet and you have complete confidence that you can spend it tomorrow and receive the same amount of goods as you would have received had you spent it today, money has demonstrated its function as a medium of exchange.

If there is 100 per cent reserve banking, the money supply is unaffected by the proportion of its money that the public chooses to hold as currency rather than as bank deposits.

Economists argue that the move from barter to money increased trade and production.How is this possible?

Which of the following would NOT be used by a central bank to influence interest rates in the economy?

What are open market operations and in which circumstances are they performed?

The set of actions taken by the central bank in order to affect the money supply is known as

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