Question 1

During the Great Depression,the Federal Reserve Board:​

Accepted Answer

A) prevented many bank failures. 
B) failed to act as a lender of last resort. 
C) failed to clear checks adequately. 
D) began operating as the government's bank. 
E) issued too many bank notes. 
A) prevented many bank failures. 
B) failed to act as a lender of last resort. 
C) failed to clear checks adequately. 
D) began operating as the government's bank. 
E) issued too many bank notes. B

Question 2

The Federal Deposit Insurance Corporation (FDIC)insures the total value of all deposits in banks that are members of the Fed.​

Accepted Answer

A) True 
 B)False  False

Question 3

​The chair of the Board of Governors of the Fed serves:

Accepted Answer

A) a two-year term that coincides with that of members of Congress. 
B) a four-year term. 
C) a seven-year term. 
D) a fourteen-year term. 
E) a six-year term. 
A) a two-year term that coincides with that of members of Congress. 
B) a four-year term. 
C) a seven-year term. 
D) a fourteen-year term. 
E) a six-year term. B

Question 4

​If people use quartz as a medium of exchange,then they:

Accepted Answer

A) have a barter economy. 
B) are using commodity money. 
C) are using token money. 
D) are using legal tender. 
E) are using fiat money. 
A) have a barter economy. 
B) are using commodity money. 
C) are using token money. 
D) are using legal tender. 
E) are using fiat money.

Question 5

Paper money is a good example of commodity money.​

Accepted Answer

A) True 
 B)False

Question 6

Which type of money has the lowest opportunity cost?​

Accepted Answer

A) Silver coins 
B) Gold coins 
C) Commodity money 
D) Diamonds 
E) Fiat money 
A) Silver coins 
B) Gold coins 
C) Commodity money 
D) Diamonds 
E) Fiat money

Question 7

​The only money that can be used as a standard of value is fiat money.

Accepted Answer

A) True 
 B)False

Question 8

​Which of the following is associated with the problem of hyperinflation?

Accepted Answer

A) Money is in short supply. 
B) The value of money rises dramatically. 
C) The government runs out of money. 
D) People look for alternatives to using money. 
E) People start to hold on to money for long periods of time. 
A) Money is in short supply. 
B) The value of money rises dramatically. 
C) The government runs out of money. 
D) People look for alternatives to using money. 
E) People start to hold on to money for long periods of time.

Question 9

The chair of the Board of Governors of the Fed must resign when a new president is elected.​

Accepted Answer

A) True 
 B)False

Question 10

The law that established the Federal Reserve System is the _____.​

Accepted Answer

A) Federal Reserve Act of 1913 
B) National Banking Act of 1863 
C) Banking Act of 1933 
D) National Banking Act of 1813 
E) Federal Reserve Act of 1963 
A) Federal Reserve Act of 1913 
B) National Banking Act of 1863 
C) Banking Act of 1933 
D) National Banking Act of 1813 
E) Federal Reserve Act of 1963

Question 11

People came to accept fiat money because they believed that others would accept it as well.​

Accepted Answer

A) True 
 B)False

Question 12

Compared to many other countries,the United States has:​

Accepted Answer

A) fewer banks,with assets distributed more evenly. 
B) fewer commercial banks,with assets concentrated in a few large banks. 
C) more banks,with assets concentrated in a few large banks. 
D) more commercial banks,with deposits widely distributed among the banks. 
E) more commercial banks,with deposits concentrated in a few large banks. 
A) fewer banks,with assets distributed more evenly. 
B) fewer commercial banks,with assets concentrated in a few large banks. 
C) more banks,with assets concentrated in a few large banks. 
D) more commercial banks,with deposits widely distributed among the banks. 
E) more commercial banks,with deposits concentrated in a few large banks.

Question 13

​The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the Federal Reserve the authority to establish a reserve requirement for all financial institutions.

Accepted Answer

A) True 
 B)False

Question 14

​To say that money serves as a store of value is to say that money is a useful way to store wealth for future use.

Accepted Answer

A) True 
 B)False

Question 15

​Which of the following statements is true of a barter system?

Accepted Answer

A) In a barter system economy,no rates of exchange are defined. 
B) In a barter system economy,there are as many different rates of exchange as there are pairs of goods to trade. 
C) In a barter system economy,rates of exchange are expressed in goods per dollar. 
D) In a barter system economy,rates of exchange are expressed in dollars per good. 
E) In a barter system economy,rates of exchange are denominated in gold or silver. 
A) In a barter system economy,no rates of exchange are defined. 
B) In a barter system economy,there are as many different rates of exchange as there are pairs of goods to trade. 
C) In a barter system economy,rates of exchange are expressed in goods per dollar. 
D) In a barter system economy,rates of exchange are expressed in dollars per good. 
E) In a barter system economy,rates of exchange are denominated in gold or silver.

Question 16

Which of the following statements is true?​

Accepted Answer

A) Money market mutual funds were originally introduced by the Federal Reserve Bank of New York. 
B) Money market mutual funds initially constituted serious competition to banks and thrifts for the deposits of savers. 
C) Money market mutual funds were not originally offered by commercial banks and still are not offered by them. 
D) Money market mutual funds represent a pooling of cash assets from many countries,like dollars,francs,and pesos. 
E) Money market mutual funds are not able to offer their customers check-writing privileges. 
A) Money market mutual funds were originally introduced by the Federal Reserve Bank of New York. 
B) Money market mutual funds initially constituted serious competition to banks and thrifts for the deposits of savers. 
C) Money market mutual funds were not originally offered by commercial banks and still are not offered by them. 
D) Money market mutual funds represent a pooling of cash assets from many countries,like dollars,francs,and pesos. 
E) Money market mutual funds are not able to offer their customers check-writing privileges.

Question 17

​Whatever functions as money must be _____.

Accepted Answer

A) authorized by the government 
B) accepted as deposit by banks 
C) backed by precious metals like gold or silver 
D) completely indestructible 
E) limited in supply 
A) authorized by the government 
B) accepted as deposit by banks 
C) backed by precious metals like gold or silver 
D) completely indestructible 
E) limited in supply

Question 18

​Fiat money:

Accepted Answer

A) has value because people accept it. 
B) has a high intrinsic value. 
C) is backed by commodity reserves. 
D) is money because of its metallic content. 
E) is frequently clipped. 
A) has value because people accept it. 
B) has a high intrinsic value. 
C) is backed by commodity reserves. 
D) is money because of its metallic content. 
E) is frequently clipped.

Question 19

​The Federal Reserve banks could probably have prevented many of the bank failures in the early 1930s by:

Accepted Answer

A) raising the reserve requirement of the commercial banks. 
B) lending money to the commercial banks. 
C) improving the system whereby checks are cleared. 
D) helping to create a commission of experts to engage in a prolonged study of the problem. 
E) selling large amounts of government bonds. 
A) raising the reserve requirement of the commercial banks. 
B) lending money to the commercial banks. 
C) improving the system whereby checks are cleared. 
D) helping to create a commission of experts to engage in a prolonged study of the problem. 
E) selling large amounts of government bonds.

Question 20

Before the 1970s,bankers were happy with interest-rate ceilings because those ceilings:​

Accepted Answer

A) reduced interest-rate competition for deposits among banks. 
B) guaranteed them high profits. 
C) guaranteed them a minimum profit. 
D) enabled them to expand into other lines of commerce. 
E) allowed them to hold corporate stock. 
A) reduced interest-rate competition for deposits among banks. 
B) guaranteed them high profits. 
C) guaranteed them a minimum profit. 
D) enabled them to expand into other lines of commerce. 
E) allowed them to hold corporate stock.

During the Great Depression,the Federal Reserve Board:

The Federal Deposit Insurance Corporation (FDIC)insures the total value of all deposits in banks that are members of the Fed.

The chair of the Board of Governors of the Fed serves:

If people use quartz as a medium of exchange,then they:

Paper money is a good example of commodity money.

Which type of money has the lowest opportunity cost?

The only money that can be used as a standard of value is fiat money.

Which of the following is associated with the problem of hyperinflation?

The chair of the Board of Governors of the Fed must resign when a new president is elected.

The law that established the Federal Reserve System is the _____.

People came to accept fiat money because they believed that others would accept it as well.

Compared to many other countries,the United States has:

The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the Federal Reserve the authority to establish a reserve requirement for all financial institutions.

To say that money serves as a store of value is to say that money is a useful way to store wealth for future use.

Which of the following statements is true of a barter system?

Which of the following statements is true?

Whatever functions as money must be _____.

Fiat money:

The Federal Reserve banks could probably have prevented many of the bank failures in the early 1930s by:

Before the 1970s,bankers were happy with interest-rate ceilings because those ceilings:

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 13: Money and the Financial System

During the Great Depression,the Federal Reserve Board:​

The Federal Deposit Insurance Corporation (FDIC)insures the total value of all deposits in banks that are members of the Fed.​

​The chair of the Board of Governors of the Fed serves:

​If people use quartz as a medium of exchange,then they:

Paper money is a good example of commodity money.​

Which type of money has the lowest opportunity cost?​

​The only money that can be used as a standard of value is fiat money.

​Which of the following is associated with the problem of hyperinflation?

The chair of the Board of Governors of the Fed must resign when a new president is elected.​

The law that established the Federal Reserve System is the _____.​

People came to accept fiat money because they believed that others would accept it as well.​

Compared to many other countries,the United States has:​

​The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the Federal Reserve the authority to establish a reserve requirement for all financial institutions.

​To say that money serves as a store of value is to say that money is a useful way to store wealth for future use.

​Which of the following statements is true of a barter system?

Which of the following statements is true?​

​Whatever functions as money must be _____.

​Fiat money:

​The Federal Reserve banks could probably have prevented many of the bank failures in the early 1930s by:

Before the 1970s,bankers were happy with interest-rate ceilings because those ceilings:​

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

During the Great Depression,the Federal Reserve Board:

The Federal Deposit Insurance Corporation (FDIC)insures the total value of all deposits in banks that are members of the Fed.

The chair of the Board of Governors of the Fed serves:

If people use quartz as a medium of exchange,then they:

Paper money is a good example of commodity money.

Which type of money has the lowest opportunity cost?

The only money that can be used as a standard of value is fiat money.

Which of the following is associated with the problem of hyperinflation?

The chair of the Board of Governors of the Fed must resign when a new president is elected.

The law that established the Federal Reserve System is the _____.

People came to accept fiat money because they believed that others would accept it as well.

Compared to many other countries,the United States has:

The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the Federal Reserve the authority to establish a reserve requirement for all financial institutions.

To say that money serves as a store of value is to say that money is a useful way to store wealth for future use.

Which of the following statements is true of a barter system?

Which of the following statements is true?

Whatever functions as money must be _____.

Fiat money:

The Federal Reserve banks could probably have prevented many of the bank failures in the early 1930s by:

Before the 1970s,bankers were happy with interest-rate ceilings because those ceilings: