Question 1

Treasury Bonds are

Accepted Answer

A) liquid,but not a store of value. 
B) a store of value,but not liquid. 
C) both liquid and a store of value. 
D) neither liquid nor a store of value. 
A) liquid,but not a store of value. 
B) a store of value,but not liquid. 
C) both liquid and a store of value. 
D) neither liquid nor a store of value.

Question 2

Which list ranks assets from most to least liquid?

Accepted Answer

A) currency,fine art,stocks 
B) currency,stocks,fine art 
C) fine art,currency,stocks 
D) fine art,stocks,currency 
A) currency,fine art,stocks 
B) currency,stocks,fine art 
C) fine art,currency,stocks 
D) fine art,stocks,currency

Question 3

You saved $500 in currency in your piggy bank to purchase a new laptop. The $500 you kept in your piggy bank illustrates money’s function as a _______. The laptop’s price is posted as $500. The $500 price illustrates money’s function as a _____. You use the $500 to purchase the laptop. This transaction illustrates money’s function as a ______.

Accepted Answer

A) store of value,medium of exchange,unit of account 
B) store of value,unit of account,medium of exchange 
C) medium of exchange,unit of account,store of value 
D) medium of exchange,store of value,unit of account 
A) store of value,medium of exchange,unit of account 
B) store of value,unit of account,medium of exchange 
C) medium of exchange,unit of account,store of value 
D) medium of exchange,store of value,unit of account

Question 4

The Soviet government in the 1980's never abandoned the ruble as the official currency.However,the people of Moscow preferred to accept

Accepted Answer

A) cigarettes in exchange for goods and services,because they were convinced that cigarettes were going to soon become hard to come by. 
B) American dollars in exchange for goods and services,because rubles were extremely hard to come by. 
C) goods such as cigarettes or American dollars in exchange for goods and services,reminding us of the fact that government decree by itself is not sufficient for the success of a commodity money. 
D) All of the above are correct. 
A) cigarettes in exchange for goods and services,because they were convinced that cigarettes were going to soon become hard to come by. 
B) American dollars in exchange for goods and services,because rubles were extremely hard to come by. 
C) goods such as cigarettes or American dollars in exchange for goods and services,reminding us of the fact that government decree by itself is not sufficient for the success of a commodity money. 
D) All of the above are correct.

Question 5

M1 equals currency plus demand deposits plus

Accepted Answer

A) nothing else. 
B) other checkable deposits. 
C) traveler's checks plus other checkable deposits. 
D) traveler's checks plus other checkable deposits plus savings deposits. 
A) nothing else. 
B) other checkable deposits. 
C) traveler's checks plus other checkable deposits. 
D) traveler's checks plus other checkable deposits plus savings deposits.

Question 6

Which of the following is a store of value?

Accepted Answer

A) cash and stocks 
B) cash but not stocks 
C) stocks but not cash 
D) neither cash nor stocks 
A) cash and stocks 
B) cash but not stocks 
C) stocks but not cash 
D) neither cash nor stocks

Question 7

When we measure and record economic value,we use money as the

Accepted Answer

A) liquid asset. 
B) medium of exchange. 
C) unit of account. 
D) store of value. 
A) liquid asset. 
B) medium of exchange. 
C) unit of account. 
D) store of value.

Question 8

If traveler's checks were $1000 higher and saving deposits were $500 higher,M1 would be

Accepted Answer

A) $500 higher and M2 would be $1,500 higher. 
B) $1,000 higher and M2 would be $1,500 higher. 
C) M2 and M1 would be $1,500 higher. 
D) $1,000 high and M2 would be $500 higher. 
A) $500 higher and M2 would be $1,500 higher. 
B) $1,000 higher and M2 would be $1,500 higher. 
C) M2 and M1 would be $1,500 higher. 
D) $1,000 high and M2 would be $500 higher.

Question 9

Money

Accepted Answer

A) is a perfect store of value. 
B) is the most liquid asset. 
C) has intrinsic value,regardless of which form it takes. 
D) All of the above are correct. 
A) is a perfect store of value. 
B) is the most liquid asset. 
C) has intrinsic value,regardless of which form it takes. 
D) All of the above are correct.

Question 10

Which list ranks assets from most to least liquid?

Accepted Answer

A) money,bonds,cars,houses 
B) money,cars,houses,bonds 
C) bonds,money,cars,houses 
D) bonds,cars,money,houses 
A) money,bonds,cars,houses 
B) money,cars,houses,bonds 
C) bonds,money,cars,houses 
D) bonds,cars,money,houses

Question 11

Which of the following is not included in M1?

Accepted Answer

A) currency 
B) demand deposits 
C) traveler's checks 
D) credit cards 
A) currency 
B) demand deposits 
C) traveler's checks 
D) credit cards

Question 12

Economists use the term "money" to refer to

Accepted Answer

A) all wealth. 
B) all assets,including real assets and financial assets. 
C) all financial assets,but not real assets. 
D) those types of wealth that are regularly accepted by sellers in exchange for goods and services. 
A) all wealth. 
B) all assets,including real assets and financial assets. 
C) all financial assets,but not real assets. 
D) those types of wealth that are regularly accepted by sellers in exchange for goods and services.

Question 13

In measuring the stock of money in the U.S. ,M1 includes

Accepted Answer

A) traveler's checks. 
B) savings deposits. 
C) credit cards 
D) none of the above. 
A) traveler's checks. 
B) savings deposits. 
C) credit cards 
D) none of the above.

Question 14

If an economy used gold as money,its money would be

Accepted Answer

A) commodity money,but not fiat money. 
B) fiat money,but not commodity money. 
C) both fiat and commodity money. 
D) functioning as a store of value and as a unit of account,but not as a medium of exchange. 
A) commodity money,but not fiat money. 
B) fiat money,but not commodity money. 
C) both fiat and commodity money. 
D) functioning as a store of value and as a unit of account,but not as a medium of exchange.

Question 15

Credit card limits are included in

Accepted Answer

A) M1 but not M2. 
B) M2 but not M1. 
C) M1 and M2. 
D) neither M1 nor M2. 
A) M1 but not M2. 
B) M2 but not M1. 
C) M1 and M2. 
D) neither M1 nor M2.

Question 16

In the U.S. ,the average adult holds about $4,490 in

Accepted Answer

A) currency. 
B) wealth. 
C) M1. 
D) M2. 
A) currency. 
B) wealth. 
C) M1. 
D) M2.

Question 17

According to the article "Why Gold?',silver may be used as money.One problem with using silver as money is that

Accepted Answer

A) silver is too abundant. 
B) silver tarnishes over time. 
C) it is not a precious metal. 
D) it has a high melting point. 
A) silver is too abundant. 
B) silver tarnishes over time. 
C) it is not a precious metal. 
D) it has a high melting point.

Question 18

The confidence you have that a retailer will accept dollars in exchange for goods is based primarily on money

Accepted Answer

A) being a unit of account. 
B) being a medium of exchange. 
C) serving as a store of value. 
D) having intrinsic value. 
A) being a unit of account. 
B) being a medium of exchange. 
C) serving as a store of value. 
D) having intrinsic value.

Question 19

Derek decides to forego a major appliance purchase and save the money.He transfers $2,100 from his checking account to his money market mutual fund.As a result of this transfer,

Accepted Answer

A) both M1 and M2 decrease by $2,100. 
B) M1 increases by $2,100 and M2 increases by $2,100. 
C) M1 decreases by $2,100 and M2 increases by $2,100. 
D) M1 decreases by $2,100 and M2 stays the same. 
A) both M1 and M2 decrease by $2,100. 
B) M1 increases by $2,100 and M2 increases by $2,100. 
C) M1 decreases by $2,100 and M2 increases by $2,100. 
D) M1 decreases by $2,100 and M2 stays the same.

Question 20

Commodity money is

Accepted Answer

A) backed by gold. 
B) the principal type of money in use today. 
C) money with intrinsic value. 
D) receipts created in international trade that are used as a medium of exchange. 
A) backed by gold. 
B) the principal type of money in use today. 
C) money with intrinsic value. 
D) receipts created in international trade that are used as a medium of exchange.

Exam 16: The Monetary System: The Meaning of Money

Treasury Bonds are

Which list ranks assets from most to least liquid?

The Soviet government in the 1980's never abandoned the ruble as the official currency.However,the people of Moscow preferred to accept

M1 equals currency plus demand deposits plus

Which of the following is a store of value?

When we measure and record economic value,we use money as the

If traveler's checks were $1000 higher and saving deposits were $500 higher,M1 would be

Money

Which list ranks assets from most to least liquid?

Which of the following is not included in M1?

Economists use the term "money" to refer to

In measuring the stock of money in the U.S. ,M1 includes

If an economy used gold as money,its money would be

Credit card limits are included in

In the U.S. ,the average adult holds about $4,490 in

According to the article "Why Gold?',silver may be used as money.One problem with using silver as money is that

The confidence you have that a retailer will accept dollars in exchange for goods is based primarily on money

Derek decides to forego a major appliance purchase and save the money.He transfers $2,100 from his checking account to his money market mutual fund.As a result of this transfer,

Commodity money is

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A