Question 1

Money serves as a unit of account,which is another way of saying that money functions as

Accepted Answer

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

Question 2

What is barter? What is a double coincidence of wants? How does the existence of money affect barter?

Accepted Answer

Barter is the direct exchange of goods a...

Question 3

which of the following statements is TRUE of money during times of inflation.

Accepted Answer

A)  Money still retains the characteristic of predictability of value.
B)  Money can easily be made so people can still purchase the goods and services they want.
C)  Money is no longer a liquid asset.
D)  The opportunity cost of money falls as inflation rises.

Question 4

Describe monetary standards and how they relate in the Canadian context.

Accepted Answer

A rigorous discussion of the fiduciary m...

Question 5

Chequable deposit account balances in chartered banks are

Accepted Answer

A)  counted in the calculation of the money supply.
B)  considered a near money.
C)  considered credit,but not money.
D)  only a small component of the money supply.

Question 6

In terms of the functions of money,can credit cards be considered money?

Accepted Answer

No because they are not a unit of accoun...

Question 7

Camels have been used as money.Which function of money would this Type of money perform least well?

Accepted Answer

A)  Medium of exchange
B)  Unit of account
C)  Store of value
D)  Standard of deferred payment

Question 8

When we examine the Canadian money supply,the largest component of ________ is M1+.

Accepted Answer

A)  coins minted by the treasury
B)  chequable deposits
C)  certificates of deposit
D)  Bank of Canada notes

Question 9

A highly liquid asset

Accepted Answer

A)  has high transaction costs associated with its sale.
B)  is highly leveraged.
C)  generally has a very limited market for its resale.
D)  can be disposed of easily without loss of value.

Question 10

An decrease in the ________ would induce people to hold a larger fraction of their wealth in the form of money.

Accepted Answer

A)  unemployment rate
B)  inflation rate
C)  money supply
D)  interest rate

Question 11

The purchasing power or value of money

Accepted Answer

A)  is determined by law.
B)  varies inversely with the price level.
C)  depends on the value of gold.
D)  varies inversely with the interest rate.

Question 12

The opportunity cost of holding money is measured by

Accepted Answer

A)  a dollar.
B)  the price of government bonds.
C)  the interest yield that could have been earned by holding some other asset.
D)  the liquidity of interest-bearing assets.

Question 13

All chequable deposits are included in

Accepted Answer

A)  M1 only.
B)  M2 only.
C)  M1 and M2.
D)  savings balances only.

Question 14

Financial intermediation refers to a process whereby

Accepted Answer

A)  financial institutions accept deposits and then lend those deposits .
B)  racketeering is taking place.
C)  fiduciary clearing.is done at the central clearing house.
D)  a double coincidence of wants must occur.

Question 15

The significance of currency in the Canadian money supply has

Accepted Answer

A)  increased in recent years.
B)  decreased in recent years.
C)  remained the same in recent years.
D)  been made legal by the Depository Institutions Deregulation and Monetary Control Act of 1980.

Question 16

The use of credit cards

Accepted Answer

A)  will eventually eliminate the use of money.
B)  represents a loan of money to the user.
C)  is a use of "near money."
D)  is an example of using money as a store of value.

Question 17

The liquidity approach to measuring money stresses the role of money as a

Accepted Answer

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

Question 18

The yield that could have been earned if the asset was held in another form is commonly referred to as

Accepted Answer

A)  the cost of printing money.
B)  the cost which price decreases impose on money holders.
C)  the yield which is paid to money holders by the Canadian government.
D)  the cost of holding money.

Question 19

Suppose a new customer opens a checking account and a savings account in a commercial bank,placing $200,000 in each.Later,the bank loans the customer $200,000.For this bank,

Accepted Answer

A)  assets increased by $200,000 and liabilities increased by $100,000.
B)  assets increased by $100,000 because the loan is an asset and liabilities increased by $100,000 because the checking deposit is a liability.The savings deposit is neither an asset nor a liability.
C)  liabilities increased by $200,000 since the checking account and the savings account are liabilities while it generated no new assets.
D)  assets increased by $200,000 because the loan is an asset and liabilities increased by $400,000 because both the checking deposit and the savings deposit are liabilities to the bank.

Question 20

Describe the functions of money and provide an example of how each can be applied to money as we use it,as well as a non-money item such as a bank card or debit card (that makes it not money).

Accepted Answer

1.Unit of account - all things denominat...

Exam 12: Money and the Banking System

Camels have been used as money.Which function of money would this Type of money perform least well?

Correct AnswerverifiedShow Answer

In terms of the functions of money,can credit cards be considered money?

Correct AnswerverifiedNo because they are not a unit of accoun...View AnswerShow Answer

The significance of currency in the Canadian money supply has

Correct AnswerverifiedShow Answer

Describe the functions of money and provide an example of how each can be applied to money as we use it,as well as a non-money item such as a bank card or debit card (that makes it not money).

Correct Answerverified1.Unit of account - all things denominat...View AnswerShow Answer

A highly liquid asset

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which of the following statements is TRUE of money during times of inflation.

Correct AnswerverifiedShow Answer

The liquidity approach to measuring money stresses the role of money as a

Correct AnswerverifiedShow Answer

Describe monetary standards and how they relate in the Canadian context.

Correct AnswerverifiedA rigorous discussion of the fiduciary m...View AnswerShow Answer

The yield that could have been earned if the asset was held in another form is commonly referred to as

Correct AnswerverifiedShow Answer

Money serves as a unit of account,which is another way of saying that money functions as

Correct AnswerverifiedShow Answer

Financial intermediation refers to a process whereby

Correct AnswerverifiedShow Answer

Suppose a new customer opens a checking account and a savings account in a commercial bank,placing $200,000 in each.Later,the bank loans the customer $200,000.For this bank,

Correct AnswerverifiedShow Answer

The purchasing power or value of money

Correct AnswerverifiedShow Answer

Chequable deposit account balances in chartered banks are

Correct AnswerverifiedShow Answer

The opportunity cost of holding money is measured by

Correct AnswerverifiedShow Answer

The use of credit cards

Correct AnswerverifiedShow Answer

An decrease in the ________ would induce people to hold a larger fraction of their wealth in the form of money.

Correct AnswerverifiedShow Answer

What is barter? What is a double coincidence of wants? How does the existence of money affect barter?

Correct AnswerverifiedBarter is the direct exchange of goods a...View AnswerShow Answer

All chequable deposits are included in

Correct AnswerverifiedShow Answer

When we examine the Canadian money supply,the largest component of ________ is M1+.

Correct AnswerverifiedShow Answer

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No because they are not a unit of accoun...
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Correct Answer
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1.Unit of account - all things denominat...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A rigorous discussion of the fiduciary m...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Barter is the direct exchange of goods a...
View Answer

Correct Answer
verified

Correct Answer
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