Question 1

Small-denomination time deposits refer to certificates of deposit with a denomination of less than

Accepted Answer

A) $1,000. 
B) $10,000. 
C) $100,000. 
D) $1,000,000. 
A) $1,000. 
B) $10,000. 
C) $100,000. 
D) $1,000,000.

Question 2

If peanuts serve as a medium of exchange,a unit of account,and a store of value,then peanuts are

Accepted Answer

A) bank deposits. 
B) reserves. 
C) money. 
D) loanable funds. 
A) bank deposits. 
B) reserves. 
C) money. 
D) loanable funds.

Question 3

A smart card is the equivalent of

Accepted Answer

A) cash. 
B) savings bonds. 
C) savings deposits. 
D) certificates of deposit. 
A) cash. 
B) savings bonds. 
C) savings deposits. 
D) certificates of deposit.

Question 4

Whatever a society uses as money,the distinguishing characteristic is that it must

Accepted Answer

A) be completely inflation proof. 
B) be generally acceptable as payment for goods and services or in the repayment of debt. 
C) contain gold. 
D) be produced by the government. 
A) be completely inflation proof. 
B) be generally acceptable as payment for goods and services or in the repayment of debt. 
C) contain gold. 
D) be produced by the government.

Question 5

If an individual moves money from a money market deposit account to currency

Accepted Answer

A) M1 increases and M2 stays the same. 
B) M1 stays the same and M2 increases. 
C) M1 stays the same and M2 stays the same. 
D) M1 increases and M2 decreases. 
A) M1 increases and M2 stays the same. 
B) M1 stays the same and M2 increases. 
C) M1 stays the same and M2 stays the same. 
D) M1 increases and M2 decreases.

Question 6

Which of the following is included in both M1 and M2?

Accepted Answer

A) currency 
B) savings deposits 
C) small-denomination time deposits 
D) money market deposit accounts 
A) currency 
B) savings deposits 
C) small-denomination time deposits 
D) money market deposit accounts

Question 7

Which of the following is a TRUE statement?

Accepted Answer

A) Money and income are flow variables. 
B) Money is a flow variable. 
C) Income is a flow variable. 
D) Money and income are stock variables. 
A) Money and income are flow variables. 
B) Money is a flow variable. 
C) Income is a flow variable. 
D) Money and income are stock variables.

Question 8

The conversion of a barter economy to one that uses money

Accepted Answer

A) increases efficiency by reducing the need to exchange goods and services. 
B) increases efficiency by reducing the need to specialize. 
C) increases efficiency by reducing transactions costs. 
D) does not increase economic efficiency. 
A) increases efficiency by reducing the need to exchange goods and services. 
B) increases efficiency by reducing the need to specialize. 
C) increases efficiency by reducing transactions costs. 
D) does not increase economic efficiency.

Question 9

When there are many goods in a barter system,

Accepted Answer

A) transactions costs are minimized. 
B) there are multiple prices for each good. 
C) there is only one store of value. 
D) exchange of services is impossible. 
A) transactions costs are minimized. 
B) there are multiple prices for each good. 
C) there is only one store of value. 
D) exchange of services is impossible.

Question 10

Bitcoin fails to satisfy which two of the three functions of money?

Accepted Answer

A) unit of account and store of value 
B) medium of exchange and unit of account 
C) medium of exchange and store of value 
D) bitcoin satisfies all of the functions of money 
A) unit of account and store of value 
B) medium of exchange and unit of account 
C) medium of exchange and store of value 
D) bitcoin satisfies all of the functions of money

Question 11

An important characteristic of the modern payments system has been the rapidly increasing use of

Accepted Answer

A) checks and decreasing use of currency. 
B) electronic fund transfers. 
C) commodity monies. 
D) fiat money. 
A) checks and decreasing use of currency. 
B) electronic fund transfers. 
C) commodity monies. 
D) fiat money.

Question 12

________ money could be used for some other purpose other than as a medium of exchange,for example,gold coins could be melted down and turned into gold jewelry.

Accepted Answer

A) Commodity 
B) Fiat 
C) Paper 
D) Electronic 
A) Commodity 
B) Fiat 
C) Paper 
D) Electronic

Question 13

________ is a flow of earnings per unit of time.

Accepted Answer

A) Income 
B) Money 
C) Wealth 
D) Currency 
A) Income 
B) Money 
C) Wealth 
D) Currency

Question 14

If there are five goods in a barter economy,one needs to know ten prices in order to exchange one good for another. If,however,there are ten goods in a barter economy,then one needs to know ________ prices in order to exchange one good for another.

Accepted Answer

A) 20 
B) 25 
C) 30 
D) 45 
A) 20 
B) 25 
C) 30 
D) 45

Question 15

Which of the following is NOT included in the M1 measure of money but is included in the M2 measure of money?

Accepted Answer

A) currency 
B) traveler's checks 
C) demand deposits 
D) small-denomination time deposits 
A) currency 
B) traveler's checks 
C) demand deposits 
D) small-denomination time deposits

Question 16

Which of the following statements best explains how the use of money in an economy increases economic efficiency?

Accepted Answer

A) Money increases economic efficiency because it is costless to produce. 
B) Money increases economic efficiency because it discourages specialization. 
C) Money increases economic efficiency because it decreases transactions costs. 
D) Money cannot have an effect on economic efficiency. 
A) Money increases economic efficiency because it is costless to produce. 
B) Money increases economic efficiency because it discourages specialization. 
C) Money increases economic efficiency because it decreases transactions costs. 
D) Money cannot have an effect on economic efficiency.

Question 17

During the German hyperinflation after World War I,transactions costs skyrocketed. As a result,not surprisingly,output

Accepted Answer

A) declined sharply. 
B) increased dramatically. 
C) did not change. 
D) grew at a much smaller pace than prior to the war. 
A) declined sharply. 
B) increased dramatically. 
C) did not change. 
D) grew at a much smaller pace than prior to the war.

Question 18

The Federal Reserve publishes the data on the monetary aggregates each week on

Accepted Answer

A) Thursday. 
B) Monday. 
C) Friday. 
D) Wednesday. 
A) Thursday. 
B) Monday. 
C) Friday. 
D) Wednesday.

Question 19

If an individual moves money from a small-denomination time deposit to a demand deposit account

Accepted Answer

A) M1 increases and M2 stays the same. 
B) M1 stays the same and M2 increases. 
C) M1 stays the same and M2 stays the same. 
D) M1 increases and M2 decreases. 
A) M1 increases and M2 stays the same. 
B) M1 stays the same and M2 increases. 
C) M1 stays the same and M2 stays the same. 
D) M1 increases and M2 decreases.

Exam 3: What Is Money

Small-denomination time deposits refer to certificates of deposit with a denomination of less than

If peanuts serve as a medium of exchange,a unit of account,and a store of value,then peanuts are

A smart card is the equivalent of

Whatever a society uses as money,the distinguishing characteristic is that it must

If an individual moves money from a money market deposit account to currency

Which of the following is included in both M1 and M2?

Which of the following is a TRUE statement?

The conversion of a barter economy to one that uses money

When there are many goods in a barter system,

Bitcoin fails to satisfy which two of the three functions of money?

An important characteristic of the modern payments system has been the rapidly increasing use of

________ money could be used for some other purpose other than as a medium of exchange,for example,gold coins could be melted down and turned into gold jewelry.

________ is a flow of earnings per unit of time.

If there are five goods in a barter economy,one needs to know ten prices in order to exchange one good for another. If,however,there are ten goods in a barter economy,then one needs to know ________ prices in order to exchange one good for another.

Which of the following is NOT included in the M1 measure of money but is included in the M2 measure of money?

Which of the following statements best explains how the use of money in an economy increases economic efficiency?

During the German hyperinflation after World War I,transactions costs skyrocketed. As a result,not surprisingly,output

The Federal Reserve publishes the data on the monetary aggregates each week on

If an individual moves money from a small-denomination time deposit to a demand deposit account

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

The Meaning of Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Financial Crises

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Market Economies

The ISLM Model

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