Question 1

Which of the following assets are counted in M2?

Accepted Answer

A)   Gold
B)   Mutual market mutual funds
C)   Credit card accounts
D)   Real estateE) A) and C)
F) B) and C)

Question 2

When defining money as M1, you are looking at those assets that

Accepted Answer

A)   can be used in transactions.
B)   serve as a medium of exchange but are not liquid.
C)   are liquid but do not serve as a medium of exchange.
D)   earn interest.E) None of the above
F) A) and B)

Question 3

Barter requires a coincidence of wants.

Accepted Answer

A) True 
 B)False

Question 4

For barter to occur there has to be

Accepted Answer

A)   a commodity to serve as a medium of exchange.
B)   a formal market where prices are quoted.
C)   a coincidence of wants.
D)   a chain of middlemen facilitating the exchange.E) B) and C)
F) All of the above

Question 5

Under _________ reserve banking, banks do not hold all of their deposits as reserves.

Accepted Answer

The answer of Under _________ reserve banking, banks do not...

Question 6

The Federal _________ _________ Committee governs the growth of the money supply.

Accepted Answer

The answer of The Federal _________ _________ Committee governs the...

Question 7

United States coins and currency are backed by

Accepted Answer

A)   silver.
B)   gold.
C)   the Congress.
D)   nothing.E) A) and B)
F) A) and D)

Question 8

The assets included in M1 are

Accepted Answer

A)   not liquid.
B)   assets of value that do not serve as a medium of exchange.
C)   the money that has been created outside the banking system.
D)   readily used to conduct marketplace transactions.E) None of the above
F) B) and C)

Question 9

Near moneys cannot be used in transactions, but they are highly _________ .

Accepted Answer

The answer of Near moneys cannot be used in transactions,...

Question 10

Barter requires a _________ of wants.

Accepted Answer

The answer of Barter requires a _________ of wants....

Question 11

How does money make an economy more efficient?

Accepted Answer

By facilitating exch...

Question 12

What are thrift institutions?

Accepted Answer

Savings banks, savin...

Question 13

To the extent that banks hold excess reserves, the actual expansion of the money supply will be greater than that predicted by the size of the money multiplier.

Accepted Answer

A) True 
 B)False

Question 14

Money market deposit accounts are

Accepted Answer

A)   included in M1 but not in M2.
B)   included in M2 but not in M1.
C)   included both in M1 and M2.
D)   included neither in M1 nor M2.E) A) and C)
F) None of the above

Question 15

M2 is money held for

Accepted Answer

A)   investment purposes.
B)   liquidity purposes.
C)   transaction purposes.
D)   security purposes.E) None of the above
F) All of the above

Question 16

Money is

Accepted Answer

A)   anything that serves as a medium of exchange or unit of accounting.
B)   a twentieth-century invention.
C)   an asset that never loses value over time.
D)   anything of value.E) None of the above
F) A) and B)

Question 17

The narrowest definition of money is _________.

Accepted Answer

The answer of The narrowest definition of money is _________....

Question 18

Savings deposits are included in M2 but not in M1.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is TRUE?

Accepted Answer

A)   M2 is always larger than M1.
B)   M1 is always larger than M2.
C)   M2 is the narrowest definition of the money supply.
D)   Credit card accounts are included in M1 but not in M2.E) A) and C)
F) None of the above

Question 20

The money supply in the United States is backed by

Accepted Answer

A)   trust in its acceptability.
B)   gold.
C)   silver.
D)   government policy.E) All of the above
F) A) and D)

Exam 13: Money and Our Banking System

Money is

Correct AnswerverifiedShow Answer

Which of the following assets are counted in M2?

Correct AnswerverifiedShow Answer

To the extent that banks hold excess reserves, the actual expansion of the money supply will be greater than that predicted by the size of the money multiplier.

Correct AnswerverifiedShow Answer

The money supply in the United States is backed by

Correct AnswerverifiedShow Answer

The assets included in M1 are

Correct AnswerverifiedShow Answer

How does money make an economy more efficient?

Correct AnswerverifiedBy facilitating exch...View AnswerShow Answer

Under _________ reserve banking, banks do not hold all of their deposits as reserves.

Correct AnswerverifiedShow Answer

Near moneys cannot be used in transactions, but they are highly _________ .

Correct AnswerverifiedShow Answer

Savings deposits are included in M2 but not in M1.

Correct AnswerverifiedShow Answer

The narrowest definition of money is _________.

Correct AnswerverifiedShow Answer

The Federal _________ _________ Committee governs the growth of the money supply.

Correct AnswerverifiedShow Answer

Barter requires a _________ of wants.

Correct AnswerverifiedShow Answer

M2 is money held for

Correct AnswerverifiedShow Answer

Which of the following is TRUE?

Correct AnswerverifiedShow Answer

What are thrift institutions?

Correct AnswerverifiedSavings banks, savin...View AnswerShow Answer

When defining money as M1, you are looking at those assets that

Correct AnswerverifiedShow Answer

Money market deposit accounts are

Correct AnswerverifiedShow Answer

Barter requires a coincidence of wants.

Correct AnswerverifiedShow Answer

For barter to occur there has to be

Correct AnswerverifiedShow Answer

United States coins and currency are backed by

Correct AnswerverifiedShow Answer

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By facilitating exch...
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The Federal _ _ Committee governs the growth of the money supply.

Correct Answer
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Savings banks, savin...
View Answer

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