Question 1

Which of the following is a store of value?

Accepted Answer

A) currency 
B) U.S.government bonds 
C) fine art 
D) All of the above are correct. 
A) currency 
B) U.S.government bonds 
C) fine art 
D) All of the above are correct.

Question 2

You receive money as payment for babysitting your neighbors' children.This best illustrates which function of money?

Accepted Answer

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

Question 3

Liquidity refers to

Accepted Answer

A) the ease with which an asset is converted to the medium of exchange. 
B) the measurement of the intrinsic value of commodity money. 
C) the measurement of the durability of a good. 
D) how many time a dollar circulates in a given year. 
A) the ease with which an asset is converted to the medium of exchange. 
B) the measurement of the intrinsic value of commodity money. 
C) the measurement of the durability of a good. 
D) how many time a dollar circulates in a given year.

Question 4

Which of the following is included in both M1 and M2?

Accepted Answer

A) savings deposits 
B) demand deposits 
C) small time deposits 
D) money market mutual funds 
A) savings deposits 
B) demand deposits 
C) small time deposits 
D) money market mutual funds

Question 5

Which of the following items is not included in the most narrow definition of money,M1?

Accepted Answer

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

Question 6

All U.S.paper dollars read "This note is legal tender for all debts,public and private." This statement represents which characteristic of US currency?

Accepted Answer

A) The U.S.operates under the gold standard. 
B) U.S.paper money is commodity money. 
C) U.S.paper money is fiat money. 
D) U.S.paper money is a convenient store of wealth. 
A) The U.S.operates under the gold standard. 
B) U.S.paper money is commodity money. 
C) U.S.paper money is fiat money. 
D) U.S.paper money is a convenient store of wealth.

Question 7

Which of the following is not included in M1?

Accepted Answer

A) a $5 bill in your wallet 
B) $100 in your checking account 
C) $500 in your savings account 
D) All of the above are included in M1. 
A) a $5 bill in your wallet 
B) $100 in your checking account 
C) $500 in your savings account 
D) All of the above are included in M1.

Question 8

Economists use the word "money" to refer to

Accepted Answer

A) income generated by the production of goods and services. 
B) those assets regularly used to buy goods and services. 
C) financial assets such as stocks and bonds. 
D) any type of wealth. 
A) income generated by the production of goods and services. 
B) those assets regularly used to buy goods and services. 
C) financial assets such as stocks and bonds. 
D) any type of wealth.

Question 9

Which of the following is not included in M1?

Accepted Answer

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

Question 10

People can write checks against

Accepted Answer

A) demand deposits and money market mutual funds 
B) demand deposits but not money market mutual funds 
C) money market mutual funds but not demand deposits 
D) neither demand deposits nor money market mutual funds 
A) demand deposits and money market mutual funds 
B) demand deposits but not money market mutual funds 
C) money market mutual funds but not demand deposits 
D) neither demand deposits nor money market mutual funds

Question 11

In the United States,currency holdings per person average about

Accepted Answer

A) $110;one explanation for this relatively small average is that many people use credit and debit cards to make transactions. 
B) $110;one explanation for this relatively small average is that U.S.citizens hold a lot of foreign currency. 
C) $4,490;one explanation for this relatively large amount is that criminals probably prefer currency as a medium of exchange. 
D) $4,490;one explanation for this relatively large average is that U.S.citizens hold a lot of foreign currency. 
A) $110;one explanation for this relatively small average is that many people use credit and debit cards to make transactions. 
B) $110;one explanation for this relatively small average is that U.S.citizens hold a lot of foreign currency. 
C) $4,490;one explanation for this relatively large amount is that criminals probably prefer currency as a medium of exchange. 
D) $4,490;one explanation for this relatively large average is that U.S.citizens hold a lot of foreign currency.

Question 12

One surprising thing about the U.S.money stock is that

Accepted Answer

A) banks hold so much currency relative to the public. 
B) the public holds so much currency relative to banks. 
C) there is so little currency per person. 
D) there is so much currency per person. 
A) banks hold so much currency relative to the public. 
B) the public holds so much currency relative to banks. 
C) there is so little currency per person. 
D) there is so much currency per person.

Question 13

When in France you notice that prices are posted in euros,this best illustrates money's function as

Accepted Answer

A) a store of value. 
B) a medium of exchange. 
C) a unit of account. 
D) a method of barter. 
A) a store of value. 
B) a medium of exchange. 
C) a unit of account. 
D) a method of barter.

Question 14

Which list ranks assets from most to least liquid?

Accepted Answer

A) currency,demand deposits,money market mutual funds 
B) currency,money market mutual funds,demand deposits 
C) money market mutual funds,demand deposits,currency 
D) demand deposits,money market mutual funds,currency 
A) currency,demand deposits,money market mutual funds 
B) currency,money market mutual funds,demand deposits 
C) money market mutual funds,demand deposits,currency 
D) demand deposits,money market mutual funds,currency

Question 15

The measure of the money stock called M1 includes

Accepted Answer

A) wealth held by people in their checking accounts. 
B) wealth held by people in their savings accounts. 
C) wealth held by people in money market mutual funds. 
D) everything that is included in M2 plus some additional items. 
A) wealth held by people in their checking accounts. 
B) wealth held by people in their savings accounts. 
C) wealth held by people in money market mutual funds. 
D) everything that is included in M2 plus some additional items.

Question 16

If an economy uses silver as money,then that economy's money

Accepted Answer

A) serves as a store of value but not as a medium of exchange. 
B) serves as a medium of exchange but not as a unit of account. 
C) is commodity money. 
D) has no intrinsic value. 
A) serves as a store of value but not as a medium of exchange. 
B) serves as a medium of exchange but not as a unit of account. 
C) is commodity money. 
D) has no intrinsic value.

Question 17

Which of the following items is included in M2?

Accepted Answer

A) credit cards 
B) money market mutual funds 
C) corporate bonds 
D) large time deposits 
A) credit cards 
B) money market mutual funds 
C) corporate bonds 
D) large time deposits

Question 18

The set of items that serve as media of exchange clearly includes

Accepted Answer

A) demand deposits. 
B) short-term bonds. 
C) credit cards. 
D) All of the above are correct. 
A) demand deposits. 
B) short-term bonds. 
C) credit cards. 
D) All of the above are correct.

Question 19

Mia puts money into a piggy bank so she can spend it later.What function of money does this illustrate?

Accepted Answer

A) store of value 
B) medium of exchange 
C) unit of account 
D) None of the above is correct. 
A) store of value 
B) medium of exchange 
C) unit of account 
D) None of the above is correct.

Question 20

Given the following information,what are the

Accepted Answer

A) M1 = $3,150 billion,M2 = $6,200 billion. 
B) M1 = $1,350 billion,M2 = $5,600 billion. 
C) M1 = $1,400 billion,M2 = $6,200 billion. 
D) M1 = $1,300 billion,M2 = $5,600 billion. 
A) M1 = $3,150 billion,M2 = $6,200 billion. 
B) M1 = $1,350 billion,M2 = $5,600 billion. 
C) M1 = $1,400 billion,M2 = $6,200 billion. 
D) M1 = $1,300 billion,M2 = $5,600 billion.

Exam 16: The Monetary System: The Meaning of Money

Which of the following is a store of value?

You receive money as payment for babysitting your neighbors' children.This best illustrates which function of money?

Liquidity refers to

Which of the following is included in both M1 and M2?

Which of the following items is not included in the most narrow definition of money,M1?

All U.S.paper dollars read "This note is legal tender for all debts,public and private." This statement represents which characteristic of US currency?

Which of the following is not included in M1?

Economists use the word "money" to refer to

Which of the following is not included in M1?

People can write checks against

In the United States,currency holdings per person average about

One surprising thing about the U.S.money stock is that

When in France you notice that prices are posted in euros,this best illustrates money's function as

Which list ranks assets from most to least liquid?

The measure of the money stock called M1 includes

If an economy uses silver as money,then that economy's money

Which of the following items is included in M2?

The set of items that serve as media of exchange clearly includes

Mia puts money into a piggy bank so she can spend it later.What function of money does this illustrate?

Given the following information,what are the

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