Question 1

Demand deposits are part of the M1 money supply.

Accepted Answer

A) True 
 B)False

Question 2

Token coins are

Accepted Answer

A)   full-bodied coins
B)   coins containing metal of less value than their stated value
C)   coins containing gold or silver
D)   representative full-bodied money

Question 3

A monetary standard based on two metals, usually silver and gold, is called a dual-metal standard.

Accepted Answer

A) True 
 B)False

Question 4

Historically speaking, ___________ taken as a group has/have generally been a surplus economic unit in the past:

Accepted Answer

A)   individuals
B)   business
C)   government
D)   foreigners

Question 5

Which of the following describes the basic function of money?

Accepted Answer

A)   store of purchasing power
B)   standard of value
C)   medium of exchange
D)   liquidity

Question 6

Federal funds are money market securities.

Accepted Answer

A) True 
 B)False

Question 7

The price level of goods and services may be expressed as the ratio of _____________.

Accepted Answer

A)   GDP to real output
B)   real output to GDP
C)   Velocity to GDP
D)   real output to velocity

Question 8

When it is a means of paying for goods and services and discharging debts, money is referred to as a

Accepted Answer

A)   store of purchasing power
B)   medium of exchange
C)   standard of value
D)   liquid asset

Question 9

Which is included in definitions of the M2 money supply?

Accepted Answer

A)   outstanding balances on credit cards
B)   credit card limits
C)   Federal Reserve notes
D)   gold

Question 10

Today's Federal Reserve notes are

Accepted Answer

A)   backed by gold
B)   backed by silver
C)   fiat money
D)   full bodied money

Question 11

Full-bodied money is a monetary standard based on two metals, usually silver and gold.

Accepted Answer

A) True 
 B)False

Question 12

M1 money supply consists of currency, travelers' checks, demand deposits, and other checkable deposits.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is most correct?

Accepted Answer

A)   Both gold and silver have now been completely removed from any monetary role in the U.S. economy.
B)   Savings deposits and small time deposits at depository institutions constitute part of the M1 money supply definition.
C)   Fiat money is gold coins issued by central banks under authority of the government.
D)   The monetary system of the United States today is based on a dollar standard, and the dollar can be converted into gold.

Question 14

In the U.S., the dollar was defined in terms of gold until the

Accepted Answer

A)   present time
B)   1980s
C)   1970s
D)   1960s

Question 15

Fiat money is

Accepted Answer

A)   paper money issued by central banks without full metallic backing
B)   government notes representing a specific amount of gold in storage
C)   full-bodied money
D)   bimetallic money

Question 16

Commercial paper is short-term promissory notes issued by a high credit-quality corporation using assets of that corporation as security.

Accepted Answer

A) True 
 B)False

Question 17

The U.S. bimetallic standard was based on:

Accepted Answer

A)   gold and platinum
B)   silver and gold
C)   gold and copper
D)   silver and copper

Question 18

The three functions of money are:

Accepted Answer

A)   medium of exchange, store of value, and measure of liquidity
B)   conduit for international trade, store of value, and standard of value
C)   medium of exchange, store of value, and standard of value
D)   inflation hedge, measure of liquidity, and medium of exchange

Question 19

Our monetary standard today is the paper dollar, issued by the Federal Reserve, and can be exchanged for gold or silver.

Accepted Answer

A) True 
 B)False

Question 20

____________ provide predetermined credit limits to consumers at the time the cards are issued.

Accepted Answer

A)   debit cards
B)   ATM cards
C)   credit cards
D)   transfer cards

Exam 2: Money and the Monetary System

Commercial paper is short-term promissory notes issued by a high credit-quality corporation using assets of that corporation as security.

Correct AnswerverifiedShow Answer

Which is included in definitions of the M2 money supply?

Correct AnswerverifiedShow Answer

A monetary standard based on two metals, usually silver and gold, is called a dual-metal standard.

Correct AnswerverifiedShow Answer

Today's Federal Reserve notes are

Correct AnswerverifiedShow Answer

Fiat money is

Correct AnswerverifiedShow Answer

Which of the following statements is most correct?

Correct AnswerverifiedShow Answer

____________ provide predetermined credit limits to consumers at the time the cards are issued.

Correct AnswerverifiedShow Answer

Token coins are

Correct AnswerverifiedShow Answer

When it is a means of paying for goods and services and discharging debts, money is referred to as a

Correct AnswerverifiedShow Answer

Demand deposits are part of the M1 money supply.

Correct AnswerverifiedShow Answer

Historically speaking, ___________ taken as a group has/have generally been a surplus economic unit in the past:

Correct AnswerverifiedShow Answer

Full-bodied money is a monetary standard based on two metals, usually silver and gold.

Correct AnswerverifiedShow Answer

The three functions of money are:

Correct AnswerverifiedShow Answer

Our monetary standard today is the paper dollar, issued by the Federal Reserve, and can be exchanged for gold or silver.

Correct AnswerverifiedShow Answer

Federal funds are money market securities.

Correct AnswerverifiedShow Answer

The U.S. bimetallic standard was based on:

Correct AnswerverifiedShow Answer

Which of the following describes the basic function of money?

Correct AnswerverifiedShow Answer

In the U.S., the dollar was defined in terms of gold until the

Correct AnswerverifiedShow Answer

The price level of goods and services may be expressed as the ratio of _____________.

Correct AnswerverifiedShow Answer

M1 money supply consists of currency, travelers' checks, demand deposits, and other checkable deposits.

Correct AnswerverifiedShow Answer

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