Question 1

Anything that is commonly acceptable as a payment for goods and services is called ________.

Accepted Answer

The answer of Anything that is commonly acceptable as a...

Question 2

Which of the following information about fiat money is false?

Accepted Answer

A)  It must be issued by a sanctioned monetary authority. 
B)  It serves as a medium of exchange. 
C)  It has virtually no intrinsic value. 
D)  All of the above statements about fiat money are true. 
A)  It must be issued by a sanctioned monetary authority. 
B)  It serves as a medium of exchange. 
C)  It has virtually no intrinsic value. 
D)  All of the above statements about fiat money are true.

Question 3

Financial capital is money raised by business owners to fund new business ventures.

Accepted Answer

A) True 
 B)False

Question 4

Money is a convenience that makes the economic pie bigger.

Accepted Answer

A) True 
 B)False

Question 5

In an economy, newly-issued money originates from

Accepted Answer

A)  the central bank. 
B)  commercial banks. 
C)  the sale of stocks and bonds. 
D)  the deposits of individuals. 
A)  the central bank. 
B)  commercial banks. 
C)  the sale of stocks and bonds. 
D)  the deposits of individuals.

Question 6

Money's medium of exchange function helps to compute the real value of labor.

Accepted Answer

A) True 
 B)False

Question 7

The two functions that are critical to the key role that commercial banks play in stabilizing the economy are accepting deposits and making loans.

Accepted Answer

A) True 
 B)False

Question 8

What are four functions of financial instruments?

Accepted Answer

1. They may be used to raise f

Question 9

Loans issued by banks for the purpose of purchasing real estate or buildings are called

Accepted Answer

A)  peer-to-peer loans. 
B)  payday loans. 
C)  bonds. 
D)  mortgage loans. 
A)  peer-to-peer loans. 
B)  payday loans. 
C)  bonds. 
D)  mortgage loans.

Question 10

Money's ability to store value depends on how fast prices in the economy are increasing.

Accepted Answer

A) True 
 B)False

Question 11

Spreading wealth across multiple investments is called

Accepted Answer

A)  diversification. 
B)  arbitrage. 
C)  speculation. 
D)  asset liquification. 
A)  diversification. 
B)  arbitrage. 
C)  speculation. 
D)  asset liquification.

Question 12

Why must the M2 measure of the money supply always be larger than the M1 measure?

Accepted Answer

The M2 measure of the money supply inclu

Question 13

Scenario 18.1: Curly, Moe, Larry, and Shemp are the four inhabitants of a small island. Moe has 200 gold coins, the only money on the island. He takes the coins to Curly, a goldsmith, for storage and Curly issues Moe a receipt for the 200 coins he has deposited with Curly. Larry comes to Curly to borrow 100 gold coins, signing a legally binding promise to repay the coins, and Curly issues Larry a receipt saying that Larry now has 100 gold coins on deposit. Upon finding out that Larry borrowed gold coins from Curly, Shemp comes to Curly to borrow 200 gold coins. Since Curly has 200 actual gold coins on deposit, he gets Shemp to sign a legally binding promise to repay the 200 coins and then issues Shemp a receipt saying that Shemp now has 200 gold coins on deposit.
-Refer to Scenario 18.1. When Curly made the loans to Larry and Shemp, the money supply

Accepted Answer

A)  did not change. 
B)  decreased by 300 coins. 
C)  increased by 300 coins. 
D)  increased by 500 coins. 
A)  did not change. 
B)  decreased by 300 coins. 
C)  increased by 300 coins. 
D)  increased by 500 coins.

Question 14

Mutual funds are diversified financial instruments that represent a large number of stocks, bonds, and/or other financial assets.

Accepted Answer

A) True 
 B)False

Question 15

If Veronica withdraws $1,500 from her checking account and holds it as currency, then M1 will ________ and M2 will ________.

Accepted Answer

A)  increase; decrease 
B)  increase; not change 
C)  not change; decrease 
D)  not change; not change 
A)  increase; decrease 
B)  increase; not change 
C)  not change; decrease 
D)  not change; not change

Question 16

Which of the following is true of central banks?

Accepted Answer

A)  They are responsible for issuing currency. 
B)  They control the amount of money in circulation. 
C)  They have considerable influence over the level of interest rates. 
D)  all of the above 
A)  They are responsible for issuing currency. 
B)  They control the amount of money in circulation. 
C)  They have considerable influence over the level of interest rates. 
D)  all of the above

Question 17

Explain the differences between commodity money, representative commodity money, and partially backed representative commodity money.

Accepted Answer

- Commodity money is money that has intr

Anything that is commonly acceptable as a payment for goods and services is called ________.

Which of the following information about fiat money is false?

Financial capital is money raised by business owners to fund new business ventures.

Money is a convenience that makes the economic pie bigger.

In an economy, newly-issued money originates from

Money's medium of exchange function helps to compute the real value of labor.

The two functions that are critical to the key role that commercial banks play in stabilizing the economy are accepting deposits and making loans.

What are four functions of financial instruments?

Loans issued by banks for the purpose of purchasing real estate or buildings are called

Money's ability to store value depends on how fast prices in the economy are increasing.

Spreading wealth across multiple investments is called

Why must the M2 measure of the money supply always be larger than the M1 measure?

Mutual funds are diversified financial instruments that represent a large number of stocks, bonds, and/or other financial assets.

If Veronica withdraws $1,500 from her checking account and holds it as currency, then M1 will and M2 will .

Which of the following is true of central banks?

Explain the differences between commodity money, representative commodity money, and partially backed representative commodity money.

Fundamental Concepts in Economics

Cost-Benefit Analysis and the Value of a Life

Basic Game Theory: Games Between Two Players

Game Theory: Games Between Three or More Players

Free Exchange: Individual and International Trade

The Market System: Functions, Structure, and Institutions

The Nature of Pollution Problems

Government Policies to Regulate Pollution

Resource Depletion and Sustainability

Public Goods and the Role of Government

Public Goods: Tackling Large Projects and Eminent Domain

The Volunteers Dilemma: a Collective Inaction Problem

Voting: You Cant Always Get What You Want

The Economics of Health Insurance and Health Care

Segregation and Discrimination

Gross Domestic Product and the Wealth of Nations: an Introduction to the Macroeconomy

Unemployment

The Federal Reserve: Monetary Policy, Economic Activity, and Inflation

The Federal Government: Taxes, Spending, and Fiscal Policy

Income Inequality and the Redistribution of Income

Filters

Exam 18: An Introduction to Money, Banks, and the Financial System

Anything that is commonly acceptable as a payment for goods and services is called ________.

Which of the following information about fiat money is false?

Financial capital is money raised by business owners to fund new business ventures.

Money is a convenience that makes the economic pie bigger.

In an economy, newly-issued money originates from

Money's medium of exchange function helps to compute the real value of labor.

The two functions that are critical to the key role that commercial banks play in stabilizing the economy are accepting deposits and making loans.

What are four functions of financial instruments?

Loans issued by banks for the purpose of purchasing real estate or buildings are called

Money's ability to store value depends on how fast prices in the economy are increasing.

Spreading wealth across multiple investments is called

Why must the M2 measure of the money supply always be larger than the M1 measure?

Mutual funds are diversified financial instruments that represent a large number of stocks, bonds, and/or other financial assets.

If Veronica withdraws $1,500 from her checking account and holds it as currency, then M1 will ________ and M2 will ________.

Which of the following is true of central banks?

Explain the differences between commodity money, representative commodity money, and partially backed representative commodity money.

Fundamental Concepts in Economics

Cost-Benefit Analysis and the Value of a Life

Basic Game Theory: Games Between Two Players

Game Theory: Games Between Three or More Players

Free Exchange: Individual and International Trade

The Market System: Functions, Structure, and Institutions

The Nature of Pollution Problems

Government Policies to Regulate Pollution

Resource Depletion and Sustainability

Public Goods and the Role of Government

Public Goods: Tackling Large Projects and Eminent Domain

The Volunteers Dilemma: a Collective Inaction Problem

Voting: You Cant Always Get What You Want

The Economics of Health Insurance and Health Care

Segregation and Discrimination

Gross Domestic Product and the Wealth of Nations: an Introduction to the Macroeconomy

Unemployment

The Federal Reserve: Monetary Policy, Economic Activity, and Inflation

The Federal Government: Taxes, Spending, and Fiscal Policy

Income Inequality and the Redistribution of Income

Filters

If Veronica withdraws $1,500 from her checking account and holds it as currency, then M1 will and M2 will .