Question 1

If you save $3000 for a deposit on a new car,you are using money as a

Accepted Answer

A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  standard of deferred payment. 
A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  standard of deferred payment.

Question 2

Which of the following is not one of the criteria for a commodity to be a suitable medium of exchange?

Accepted Answer

A)  It should be durable. 
B)  It should have a standardised quantity. 
C)  It should be valuable. 
D)  It should be a precious metal. 
A)  It should be durable. 
B)  It should have a standardised quantity. 
C)  It should be valuable. 
D)  It should be a precious metal.

Question 3

Broad money is usually less than M3 in Australia.

Accepted Answer

A) True 
 B)False

Question 4

Suppose that you want to buy a new car and so you transfer $10 000 of your funds from a fixed-term bank account into your demand-deposit account.Carefully explain how this affects M1 and M3.

Accepted Answer

Fixed-term bank accounts are part of M3.

Question 5

When employees receive their wages after they have completed two weeks' work,this is an example of money serving as a standard of deferred payment.

Accepted Answer

A) True 
 B)False

Question 6

How does the existence of financial intermediaries affect liquidity in the financial market?

Accepted Answer

Liquidity is the ease with which a finan

Question 7

Which of the following is used by the Reserve Bank of Australia as the main measure of monetary movements in Australia?

Accepted Answer

A)  M1. 
B)  M3. 
C)  Broad money. 
D)  Credit. 
A)  M1. 
B)  M3. 
C)  Broad money. 
D)  Credit.

Question 8

The Reserve Bank Board comprises

Accepted Answer

A)  The Reserve Bank Governor, the Deputy Governor and the managers of the major banks. 
B)  The Reserve Bank Governor, the Deputy Governor, the Secretary to the Federal Government Treasury, and up to six other members. 
C)  The Reserve Bank Governor, the Deputy Governor, the Federal Government Treasurer, and members from business and academia. 
D)  The Reserve Bank Governor and six other members appointed by the government. 
A)  The Reserve Bank Governor, the Deputy Governor and the managers of the major banks. 
B)  The Reserve Bank Governor, the Deputy Governor, the Secretary to the Federal Government Treasury, and up to six other members. 
C)  The Reserve Bank Governor, the Deputy Governor, the Federal Government Treasurer, and members from business and academia. 
D)  The Reserve Bank Governor and six other members appointed by the government.

Question 9

Many international trade contracts are denominated in United States dollars,regardless of the currencies of the countries that are trading with each other.This is an example of money serving as a

Accepted Answer

A)  unit of account. 
B)  medium of exchange. 
C)  store of value. 
D)  standard of deferred payment. 
A)  unit of account. 
B)  medium of exchange. 
C)  store of value. 
D)  standard of deferred payment.

Question 10

Governments in the world today do not issue paper that can be redeemed for gold.

Accepted Answer

A) True 
 B)False

Question 11

Typically,a bank's largest asset is its

Accepted Answer

A)  reserves. 
B)  securities. 
C)  deposits. 
D)  loans. 
A)  reserves. 
B)  securities. 
C)  deposits. 
D)  loans.

Question 12

Which of the following is the most liquid asset?

Accepted Answer

A)  A Monet painting 
B)  Bonds 
C)  A car 
D)  A $20 note 
A)  A Monet painting 
B)  Bonds 
C)  A car 
D)  A $20 note

Question 13

In World War II,cigarettes were used as money in some prisoner of war camps.Given this,we would expect to see

Accepted Answer

A)  no-one ever smoking cigarettes in the prisoner of war camps. 
B)  prices of other goods expressed in terms of cigarettes. 
C)  only government-issued cigarettes being accepted as money. 
D)  people bartering instead of using cigarettes as money. 
A)  no-one ever smoking cigarettes in the prisoner of war camps. 
B)  prices of other goods expressed in terms of cigarettes. 
C)  only government-issued cigarettes being accepted as money. 
D)  people bartering instead of using cigarettes as money.

Question 14

An economy without money would have no exchange of goods and services.

Accepted Answer

A) True 
 B)False

Question 15

During World War II,prisoners of war used ________ as money.

Accepted Answer

A)  bullets 
B)  cowrie shells 
C)  chocolate 
D)  cigarettes 
A)  bullets 
B)  cowrie shells 
C)  chocolate 
D)  cigarettes

Question 16

The nature of a balance sheet is such that any entry that ________ one side of the balance sheet will ________ the other side of the balance sheet.

Accepted Answer

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

Question 17

What is commodity money? Give an example.

Accepted Answer

Commodity money is a good that is used a

Question 18

By making exchange ________,money allows for ________ and higher ________.

Accepted Answer

A)  harder; specialisation; costs 
B)  easier; specialisation; productivity 
C)  harder; generalisation; productivity 
D)  easier; specialisation; costs 
A)  harder; specialisation; costs 
B)  easier; specialisation; productivity 
C)  harder; generalisation; productivity 
D)  easier; specialisation; costs

Question 19

Robba Bank has $500 million in deposits,is meeting its usual reserve ratio,and has no excess liquidity.It has $125 million in liquid assets.Robba Bank therefore has a reserve ratio of

Accepted Answer

A)  4 per cent. 
B)  1.25 per cent. 
C)  25 per cent. 
D)  20 per cent. 
A)  4 per cent. 
B)  1.25 per cent. 
C)  25 per cent. 
D)  20 per cent.

Question 20

The liquidity property of money is the property that makes money

Accepted Answer

A)  a good store of value and a good unit of account. 
B)  a good medium of exchange and a good store of value. 
C)  a good medium of exchange and a good unit of account. 
D)  a good store of value and a good standard of deferred payment. 
A)  a good store of value and a good unit of account. 
B)  a good medium of exchange and a good store of value. 
C)  a good medium of exchange and a good unit of account. 
D)  a good store of value and a good standard of deferred payment.

If you save $3000 for a deposit on a new car,you are using money as a

Which of the following is not one of the criteria for a commodity to be a suitable medium of exchange?

Broad money is usually less than M3 in Australia.

Suppose that you want to buy a new car and so you transfer $10 000 of your funds from a fixed-term bank account into your demand-deposit account.Carefully explain how this affects M1 and M3.

When employees receive their wages after they have completed two weeks' work,this is an example of money serving as a standard of deferred payment.

How does the existence of financial intermediaries affect liquidity in the financial market?

Which of the following is used by the Reserve Bank of Australia as the main measure of monetary movements in Australia?

The Reserve Bank Board comprises

Many international trade contracts are denominated in United States dollars,regardless of the currencies of the countries that are trading with each other.This is an example of money serving as a

Governments in the world today do not issue paper that can be redeemed for gold.

Typically,a bank's largest asset is its

Which of the following is the most liquid asset?

In World War II,cigarettes were used as money in some prisoner of war camps.Given this,we would expect to see

An economy without money would have no exchange of goods and services.

During World War II,prisoners of war used ________ as money.

The nature of a balance sheet is such that any entry that one side of the balance sheet will the other side of the balance sheet.

What is commodity money? Give an example.

By making exchange ,money allows for and higher .

Robba Bank has $500 million in deposits,is meeting its usual reserve ratio,and has no excess liquidity.It has $125 million in liquid assets.Robba Bank therefore has a reserve ratio of

The liquidity property of money is the property that makes money

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 15: Aggregate Demand and Aggregate Supply Analysis

If you save $3000 for a deposit on a new car,you are using money as a

Which of the following is not one of the criteria for a commodity to be a suitable medium of exchange?

Broad money is usually less than M3 in Australia.

Suppose that you want to buy a new car and so you transfer $10 000 of your funds from a fixed-term bank account into your demand-deposit account.Carefully explain how this affects M1 and M3.

When employees receive their wages after they have completed two weeks' work,this is an example of money serving as a standard of deferred payment.

How does the existence of financial intermediaries affect liquidity in the financial market?

Which of the following is used by the Reserve Bank of Australia as the main measure of monetary movements in Australia?

The Reserve Bank Board comprises

Many international trade contracts are denominated in United States dollars,regardless of the currencies of the countries that are trading with each other.This is an example of money serving as a

Governments in the world today do not issue paper that can be redeemed for gold.

Typically,a bank's largest asset is its

Which of the following is the most liquid asset?

In World War II,cigarettes were used as money in some prisoner of war camps.Given this,we would expect to see

An economy without money would have no exchange of goods and services.

During World War II,prisoners of war used ________ as money.

The nature of a balance sheet is such that any entry that ________ one side of the balance sheet will ________ the other side of the balance sheet.

What is commodity money? Give an example.

By making exchange ________,money allows for ________ and higher ________.

Robba Bank has $500 million in deposits,is meeting its usual reserve ratio,and has no excess liquidity.It has $125 million in liquid assets.Robba Bank therefore has a reserve ratio of

The liquidity property of money is the property that makes money

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

The nature of a balance sheet is such that any entry that one side of the balance sheet will the other side of the balance sheet.

By making exchange ,money allows for and higher .