Question 1

The M2 monetary aggregate contains everything that is in M1 plus other assets that are highly ________ (can be turned into cash quickly at very little cost).

Accepted Answer

A) liquid 
B) stable 
C) consistent 
D) efficient 
A) liquid 
B) stable 
C) consistent 
D) efficient

Question 2

A feature of Bitcoin,a new type of electronic money,that make it attractive as a medium of exchange is

Accepted Answer

A) anonymous transactions. 
B) volatility of value. 
C) heavy regulations by the central bank. 
D) wide acceptance by businesses. 
A) anonymous transactions. 
B) volatility of value. 
C) heavy regulations by the central bank. 
D) wide acceptance by businesses.

Question 3

Why are most of the U.S.dollars held outside of the United States?

Accepted Answer

Concern about high inflation e

Question 4

Introduction of checks into the payments system reduced the costs of exchanging goods and services.Another advantage of checks is that

Accepted Answer

A) they provide convenient receipts for purchases. 
B) they can never be stolen. 
C) they are more widely accepted than currency. 
D) the funds from a deposited check are available for use immediately. 
A) they provide convenient receipts for purchases. 
B) they can never be stolen. 
C) they are more widely accepted than currency. 
D) the funds from a deposited check are available for use immediately.

Question 5

Currency includes

Accepted Answer

A) paper money and coins. 
B) paper money,coins,and checks. 
C) paper money and checks. 
D) paper money,coins,checks,and savings deposits. 
A) paper money and coins. 
B) paper money,coins,and checks. 
C) paper money and checks. 
D) paper money,coins,checks,and savings deposits.

Question 6

Of the following,the largest is

Accepted Answer

A) money market deposit accounts. 
B) demand deposits. 
C) M1. 
D) M2. 
A) money market deposit accounts. 
B) demand deposits. 
C) M1. 
D) M2.

Question 7

________ is used to make purchases while ________ is the total collection of pieces of property that serve to store value.

Accepted Answer

A) Money;income 
B) Wealth;income 
C) Income;money 
D) Money;wealth 
A) Money;income 
B) Wealth;income 
C) Income;money 
D) Money;wealth

Question 8

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 9

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

Accepted Answer

A) M1 decreases 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 decreases 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 10

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 11

Because inflation in Germany after World War I sometimes exceeded 1,000 % per month,one can conclude that the German economy suffered from

Accepted Answer

A) deflation. 
B) disinflation. 
C) hyperinflation. 
D) superdeflation. 
A) deflation. 
B) disinflation. 
C) hyperinflation. 
D) superdeflation.

Question 12

Recent financial innovation makes the Federal Reserve's job of conducting monetary policy

Accepted Answer

A) easier,since the Fed now knows what to consider money. 
B) more difficult,since the Fed now knows what to consider money. 
C) easier,since the Fed no longer knows what to consider money. 
D) more difficult,since the Fed no longer knows what to consider money. 
A) easier,since the Fed now knows what to consider money. 
B) more difficult,since the Fed now knows what to consider money. 
C) easier,since the Fed no longer knows what to consider money. 
D) more difficult,since the Fed no longer knows what to consider money.

Question 13

From 2004 to 2007,the growth rates of M1 and M2

Accepted Answer

A) were identical. 
B) both increased but at different rates. 
C) both decreased but at different rates. 
D) moved in opposite directions. 
A) were identical. 
B) both increased but at different rates. 
C) both decreased but at different rates. 
D) moved in opposite directions.

Question 14

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 15

The other checkable deposits component of the M1 measure reported by the Federal Reserve includes

Accepted Answer

A) negotiable time deposits. 
B) money market mutual fund shares. 
C) automatic transfer from savings accounts. 
D) money market deposit accounts. 
A) negotiable time deposits. 
B) money market mutual fund shares. 
C) automatic transfer from savings accounts. 
D) money market deposit accounts.

Exam 3: What Is Money

The M2 monetary aggregate contains everything that is in M1 plus other assets that are highly ________ (can be turned into cash quickly at very little cost).

A feature of Bitcoin,a new type of electronic money,that make it attractive as a medium of exchange is

Why are most of the U.S.dollars held outside of the United States?

Introduction of checks into the payments system reduced the costs of exchanging goods and services.Another advantage of checks is that

Currency includes

Of the following,the largest is

________ is used to make purchases while ________ is the total collection of pieces of property that serve to store value.

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

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

A person's house is part of her

Because inflation in Germany after World War I sometimes exceeded 1,000 % per month,one can conclude that the German economy suffered from

Recent financial innovation makes the Federal Reserve's job of conducting monetary policy

From 2004 to 2007,the growth rates of M1 and M2

A fall in the level of prices

The other checkable deposits component of the M1 measure reported by the Federal Reserve includes

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

Nonbank Finance

Financial Derivatives

Conflicts of Interest in the Financial Industry

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

Aggregate Demand and Supply Analysis

Monetary Policy Theory

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Market Economies

The IS Curve

The Monetary Policy and Aggregate Demand Curves

The Role of Expectations in Monetary Policy

The ISLM Model

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is used to make purchases while is the total collection of pieces of property that serve to store value.