Question 1

All but the most primitive societies use money as a medium of exchange,implying that

Accepted Answer

A) the use of money is economically efficient. 
B) barter exchange is economically efficient. 
C) barter exchange cannot work outside the family. 
D) inflation is not a concern. 
A) the use of money is economically efficient. 
B) barter exchange is economically efficient. 
C) barter exchange cannot work outside the family. 
D) inflation is not a concern.

Question 2

Which of the following statements uses the economists' definition of money?

Accepted Answer

A) I plan to earn a lot of money over the summer. 
B) Betsy is rich-she has a lot of money. 
C) I hope that I have enough money to buy my lunch today. 
D) The job with New Company gave me the opportunity to earn more money. 
A) I plan to earn a lot of money over the summer. 
B) Betsy is rich-she has a lot of money. 
C) I hope that I have enough money to buy my lunch today. 
D) The job with New Company gave me the opportunity to earn more money.

Question 3

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 4

All of the following are necessary criteria for a commodity to function as money EXCEPT

Accepted Answer

A) it must deteriorate quickly. 
B) it must be divisible. 
C) it must be easy to carry. 
D) it must be widely accepted. 
A) it must deteriorate quickly. 
B) it must be divisible. 
C) it must be easy to carry. 
D) it must be widely accepted.

Question 5

An individual's annual salary is her

Accepted Answer

A) money. 
B) income. 
C) wealth. 
D) liabilities. 
A) money. 
B) income. 
C) wealth. 
D) liabilities.

Question 6

A fall in the level of prices

Accepted Answer

A) does not affect the value of money. 
B) has an uncertain effect on the value of money. 
C) increases the value of money. 
D) reduces the value of money. 
A) does not affect the value of money. 
B) has an uncertain effect on the value of money. 
C) increases the value of money. 
D) reduces the value of money.

Question 7

A person's house is part of her

Accepted Answer

A) money. 
B) income. 
C) liabilities. 
D) wealth. 
A) money. 
B) income. 
C) liabilities. 
D) wealth.

Question 8

Explain how cigarettes could be called "money" in prisoner-of-war camps of World War II.

Accepted Answer

The cigarettes performed the three funct

Question 9

Although ________ currency is lighter than coins made of metals,a disadvantage arising from modern technology is the ease of ________.

Accepted Answer

A) paper;transport 
B) commodity;counterfeiting 
C) fiat;transport 
D) paper;counterfeiting 
A) paper;transport 
B) commodity;counterfeiting 
C) fiat;transport 
D) paper;counterfeiting

Question 10

Which of the following is NOT included in the monetary aggregate M2?

Accepted Answer

A) currency 
B) savings bonds 
C) traveler's checks 
D) checking deposits 
A) currency 
B) savings bonds 
C) traveler's checks 
D) checking deposits

Question 11

In explaining the evolution of money

Accepted Answer

A) government regulation is the most important factor. 
B) commodity money,because it is valued more highly,tends to drive out paper money. 
C) new forms of money evolve to lower transaction costs. 
D) paper money is always backed by gold and therefore more desirable than checks. 
A) government regulation is the most important factor. 
B) commodity money,because it is valued more highly,tends to drive out paper money. 
C) new forms of money evolve to lower transaction costs. 
D) paper money is always backed by gold and therefore more desirable than checks.

Question 12

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 13

________ is the narrowest monetary aggregate that the Fed reports.

Accepted Answer

A) M0 
B) M1 
C) M2 
D) M3 
A) M0 
B) M1 
C) M2 
D) M3

Question 14

Which of the following is NOT a form of e-money?

Accepted Answer

A) a debit card 
B) a credit card 
C) a stored-value card 
D) a smart card 
A) a debit card 
B) a credit card 
C) a stored-value card 
D) a smart card

Question 15

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

All but the most primitive societies use money as a medium of exchange,implying that

Which of the following statements uses the economists' definition of money?

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

All of the following are necessary criteria for a commodity to function as money EXCEPT

An individual's annual salary is her

A fall in the level of prices

A person's house is part of her

Explain how cigarettes could be called "money" in prisoner-of-war camps of World War II.

Although ________ currency is lighter than coins made of metals,a disadvantage arising from modern technology is the ease of ________.

Which of the following is NOT included in the monetary aggregate M2?

In explaining the evolution of money

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

________ is the narrowest monetary aggregate that the Fed reports.

Which of the following is NOT a form of e-money?

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

Web 1:financial Crises in Emerging Market Economies

Web 2:the Islm Model

Web 3:nonbank Finance

Web 4:financial Derivatives

Web 5:conflicts of Interest in the Financial Services Industry

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Although currency is lighter than coins made of metals,a disadvantage arising from modern technology is the ease of .