Question 1

Which of the following is a function of money?

Accepted Answer

A)  a unit of account
B)  a store of value
C)  medium of exchange
D)  All of the above are correct.E) A) and D)
F) None of the above

Question 2

When there is a reserve requirement, banks

Accepted Answer

A)  must hold exactly the required quantity of reserves.
B)  may hold more than, but not less than, the required quantity of reserves.
C)  may hold less than, but not more than, the required quantity of reserves.
D)  must seek the Fed's permission whenever they wish to expand or contract their loans to customers.E) All of the above
F) A) and B)

Question 3

For purposes of analyzing the money stock and its relationship to relevant economic variables, money is best thought of as

Accepted Answer

A)  those items that can be readily accessed and used to buy goods and services.
B)  currency only.
C)  currency plus all bank accounts.
D)  currency plus all bank accounts plus bonds.E) B) and C)
F) None of the above

Question 4

Consider five vendors at a swap meet.
​ 
​
Which of the following pairs of vendors has a double coincidence of wants?
​ 
​

Accepted Answer

A)  Christine and Dyanne
B)  ​Eric and German
C)  ​Dyanne and Amanda
D)  ​Amanda and EricE) B) and D)
F) All of the above

Question 5

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.E) A) and B)
F) A) and C)

Question 6

What is the change in the money supply when the Fed purchases $700 worth of bonds and the required reserve ratio is 14 percent assuming banks hold no excess reserves?

Accepted Answer

The answer of What is the change in the money...

Question 7

Because of the multiple tools at its disposal, the Fed can control the money supply very precisely.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is both a store of value and regularly used as a medium of exchange?

Accepted Answer

A)  cash and stocks
B)  cash but not stocks
C)  stocks but not cash
D)  neither cash nor stocksE) None of the above
F) B) and C)

Question 9

Today, bank runs are not a major problem for the U.S. banking system because

Accepted Answer

A)  bank runs are now illegal.
B)  banks now hold 100 percent of their deposits in reserve.
C)  banks are now all government-operated.
D)  the federal government now guarantees the safety of deposits at most banks.E) C) and D)
F) A) and D)

Question 10

To increase the money supply, the Fed can

Accepted Answer

A)  buy government bonds or increase the discount rate.
B)  buy government bonds or decrease the discount rate.
C)  sell government bonds or increase the discount rate.
D)  sell government bonds or decrease the discount rate.E) B) and D)
F) B) and C)

Question 11

Money, such as gold, with some intrinsic value is called _____. Money with no intrinsic value is called _____.

Accepted Answer

commodity ...

Question 12

Table 29-6. 
-Refer to Table 29-6. Assume the Fed's reserve requirement is 5 percent and all banks besides the Bank of Pleasantville are exactly in compliance with the 5 percent requirement. Further assume that people hold only deposits and no currency. Starting from the situation as depicted by the T-account, if the Bank of Pleasantville decides to make new loans so as to end up with no excess reserves, then by how much does the money supply eventually increase?

Accepted Answer

A)  $10,833.33.
B)  $13,000.
C)  $8,333.33.
D)  $10,000.E) B) and D)
F) A) and C)

Question 13

What makes the New York Federal Reserve regional bank so important?

Accepted Answer

The president of the New York Federal Re...

Question 14

Members of the Board of Governors are appointed by the president of the U.S. and confirmed by the U.S. Senate.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an example of barter?

Accepted Answer

A)  A parent gives a teenager a $10 bill in exchange for her babysitting services.
B)  A homeowner gives an exterminator a check for $50 in exchange for extermination services.
C)  A barber gives a plumber a haircut in exchange for the plumber fixing the barber's leaky faucet.
D)  All of the above are examples of barter.E) B) and D)
F) All of the above

Question 16

The Fed can increase the money supply by conducting open-market

Accepted Answer

A)  sales or by raising the discount rate.
B)  sales or by lowering the discount rate.
C)  purchases or by raising the discount rate.
D)  purchases or by lowering the discount rate.E) None of the above
F) A) and C)

Question 17

You believe the dollars you have today will be accepted in the future in exchange for goods and services. Which function of money does this illustrate?

Accepted Answer

The answer of You believe the dollars you have today...

Question 18

Most financial assets other than money function as

Accepted Answer

A)  a medium of exchange, a unit of account, and a store of value.
B)  a medium of exchange and a store of value, but not a unit of account.
C)  a store of value and a unit of account, but not a medium of exchange.
D)  a store of value, but not a unit of account nor a medium of exchangeE) None of the above
F) B) and C)

Question 19

Who can vote on Federal Open Market Committee decisions?

Accepted Answer

A)  all of the members of the Board of Governors and all of the Federal Reserve Bank presidents
B)  all of the members of the Board of Governors and some of the Federal Reserve Bank presidents
C)  some of the members of the Board of Governors and all of the Federal Reserve Bank presidents
D)  some of the members of the Board of Governors and some of the Federal Reserve Bank presidentsE) B) and C)
F) A) and D)

Question 20

Economists call an institution designed to oversee the banking system and regulate the quantity of money in the economy

Accepted Answer

A)  a central bank.
B)  a charter bank.
C)  a national bank.
D)  a state bank.E) C) and D)
F) All of the above

Exam 29: The Monetary System

When there is a reserve requirement, banks

Correct Answer
verified

Consider five vendors at a swap meet. Which of the following pairs of vendors has a double coincidence of wants?

Correct Answer
verified

Today, bank runs are not a major problem for the U.S. banking system because

Correct Answer
verified

Most financial assets other than money function as

Correct Answer
verified

Correct Answer
verified

Which of the following is a function of money?

Correct Answer
verified

Which of the following is an example of barter?

Correct Answer
verified

For purposes of analyzing the money stock and its relationship to relevant economic variables, money is best thought of as

Correct Answer
verified

Because of the multiple tools at its disposal, the Fed can control the money supply very precisely.

Correct Answer
verified

To increase the money supply, the Fed can

Correct Answer
verified

Credit card limits are included in

Correct Answer
verified

What makes the New York Federal Reserve regional bank so important?

Correct Answer
verified
The president of the New York Federal Re...
View Answer

Which of the following is both a store of value and regularly used as a medium of exchange?

Correct Answer
verified

What is the change in the money supply when the Fed purchases $700 worth of bonds and the required reserve ratio is 14 percent assuming banks hold no excess reserves?

Correct Answer
verified

The Fed can increase the money supply by conducting open-market

Correct Answer
verified

You believe the dollars you have today will be accepted in the future in exchange for goods and services. Which function of money does this illustrate?

Correct Answer
verified

Who can vote on Federal Open Market Committee decisions?

Correct Answer
verified

Members of the Board of Governors are appointed by the president of the U.S. and confirmed by the U.S. Senate.

Correct Answer
verified

Economists call an institution designed to oversee the banking system and regulate the quantity of money in the economy

Correct Answer
verified

Money, such as gold, with some intrinsic value is called _. Money with no intrinsic value is called _.

Correct Answer
verified
commodity ...
View Answer

Exam 29: The Monetary System

When there is a reserve requirement, banks

Correct AnswerverifiedShow Answer

Consider five vendors at a swap meet. ​ ​ Which of the following pairs of vendors has a double coincidence of wants? ​ ​

Correct AnswerverifiedShow Answer

Today, bank runs are not a major problem for the U.S. banking system because

Correct AnswerverifiedShow Answer

Most financial assets other than money function as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a function of money?

Correct AnswerverifiedShow Answer

Which of the following is an example of barter?

Correct AnswerverifiedShow Answer

For purposes of analyzing the money stock and its relationship to relevant economic variables, money is best thought of as

Correct AnswerverifiedShow Answer

Because of the multiple tools at its disposal, the Fed can control the money supply very precisely.

Correct AnswerverifiedShow Answer

To increase the money supply, the Fed can

Correct AnswerverifiedShow Answer

Credit card limits are included in

Correct AnswerverifiedShow Answer

What makes the New York Federal Reserve regional bank so important?

Correct AnswerverifiedThe president of the New York Federal Re...View AnswerShow Answer

Which of the following is both a store of value and regularly used as a medium of exchange?

Correct AnswerverifiedShow Answer

What is the change in the money supply when the Fed purchases $700 worth of bonds and the required reserve ratio is 14 percent assuming banks hold no excess reserves?

Correct AnswerverifiedShow Answer

The Fed can increase the money supply by conducting open-market

Correct AnswerverifiedShow Answer

You believe the dollars you have today will be accepted in the future in exchange for goods and services. Which function of money does this illustrate?

Correct AnswerverifiedShow Answer

Who can vote on Federal Open Market Committee decisions?

Correct AnswerverifiedShow Answer

Members of the Board of Governors are appointed by the president of the U.S. and confirmed by the U.S. Senate.

Correct AnswerverifiedShow Answer

Economists call an institution designed to oversee the banking system and regulate the quantity of money in the economy

Correct AnswerverifiedShow Answer

Money, such as gold, with some intrinsic value is called _____. Money with no intrinsic value is called _____.

Correct Answerverifiedcommodity ...View AnswerShow Answer

Correct Answer
verified

Consider five vendors at a swap meet. Which of the following pairs of vendors has a double coincidence of wants?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The president of the New York Federal Re...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Money, such as gold, with some intrinsic value is called _. Money with no intrinsic value is called _.

Correct Answer
verified
commodity ...
View Answer