Question 1

Which of the following statements is true of a barter system?

Accepted Answer

A) In a barter system,an individual offers one good or service to get another good or service. 
B) In a barter system,an individual offers money to get a good or service. 
C) In a barter system,an individual offers a good or service to get money. 
D) In a barter system,different kinds of money are exchanged for one another. 
E) In a barter system,all individuals are self-sufficient. 
A) In a barter system,an individual offers one good or service to get another good or service. 
B) In a barter system,an individual offers money to get a good or service. 
C) In a barter system,an individual offers a good or service to get money. 
D) In a barter system,different kinds of money are exchanged for one another. 
E) In a barter system,all individuals are self-sufficient.

Question 2

Which of the following statements is true of open-market operations?

Accepted Answer

A) Open-market operations involve clearing checks. 
B) Open-market operations involve lending money to member banks. 
C) Open-market operations involve accepting deposits from member banks. 
D) Open-market operations involve the Fed's purchase and sale of government securities. 
E) Open-market operations involve the Fed's purchase and sale of foreign exchange. 
A) Open-market operations involve clearing checks. 
B) Open-market operations involve lending money to member banks. 
C) Open-market operations involve accepting deposits from member banks. 
D) Open-market operations involve the Fed's purchase and sale of government securities. 
E) Open-market operations involve the Fed's purchase and sale of foreign exchange.

Question 3

Which of the following is not performed by the Fed?

Accepted Answer

A) Holding member bank reserves on deposit 
B) Making loans to member banks 
C) Issuing bank notes 
D) Serving as bankers to other banks 
E) Holding deposits of households and firms 
A) Holding member bank reserves on deposit 
B) Making loans to member banks 
C) Issuing bank notes 
D) Serving as bankers to other banks 
E) Holding deposits of households and firms

Question 4

Barter may be the only alternative:

Accepted Answer

A) if the supply of money dries up. 
B) if the price system is not allowed to function properly. 
C) if disinflation sets in. 
D) if hyperinflation sets in. 
E) if fiat money is discontinued. 
A) if the supply of money dries up. 
B) if the price system is not allowed to function properly. 
C) if disinflation sets in. 
D) if hyperinflation sets in. 
E) if fiat money is discontinued.

Question 5

Whatever serves as a medium of exchange is:​

Accepted Answer

A) money. 
B) money,as long as it is also the best such medium of exchange available. 
C) money,as long as it is not also a commodity. 
D) money,as long as it is not also legal tender. 
E) not money,unless it continues to be backed by its issuing institution. 
A) money. 
B) money,as long as it is also the best such medium of exchange available. 
C) money,as long as it is not also a commodity. 
D) money,as long as it is not also legal tender. 
E) not money,unless it continues to be backed by its issuing institution.

Question 6

How does money function as a unit of account?​

Accepted Answer

A) Money has intrinsic worth as a commodity. 
B) Money is convertible into commodities that have intrinsic worth. 
C) The prices of all goods and services are measured in terms of money. 
D) Things that function as money can do so because people know there is a standard of value that ultimately backs the money even if it is only faith. 
E) Bank accounts make it easy for people to store their wealth. 
A) Money has intrinsic worth as a commodity. 
B) Money is convertible into commodities that have intrinsic worth. 
C) The prices of all goods and services are measured in terms of money. 
D) Things that function as money can do so because people know there is a standard of value that ultimately backs the money even if it is only faith. 
E) Bank accounts make it easy for people to store their wealth.

Question 7

Alan puts $20,000 in an uninsured savings account at the Boston National Bank.Susie borrows $20,000 from the Boston National Bank,flies to a Central African country,and is never heard from again.Which of the following is true in this case?

Accepted Answer

A) Alan will lose her $20,000. 
B) Alan will lose her $20,000 if she and Norma are related. 
C) Alan will lose her $20,000 if the First National Bank makes all of its loans to people who run off to South Pacific islands. 
D) Alan will not lose her $20,000 no matter what happens to the First National Bank. 
E) Alan will not lose her $20,000 unless the Fed fails 
A) Alan will lose her $20,000. 
B) Alan will lose her $20,000 if she and Norma are related. 
C) Alan will lose her $20,000 if the First National Bank makes all of its loans to people who run off to South Pacific islands. 
D) Alan will not lose her $20,000 no matter what happens to the First National Bank. 
E) Alan will not lose her $20,000 unless the Fed fails

Question 8

Which of the following is true of the unit of account function of money?

Accepted Answer

A) It makes money durable in nature. 
B) It makes the relative values of goods and services more easily known. 
C) It implies that money should be made of something valuable. 
D) It implies that money can be used to save up purchasing power. 
E) It implies that money is more easily counted than goods. 
A) It makes money durable in nature. 
B) It makes the relative values of goods and services more easily known. 
C) It implies that money should be made of something valuable. 
D) It implies that money can be used to save up purchasing power. 
E) It implies that money is more easily counted than goods.

Question 9

Which of the following statements is true of a barter system?

Accepted Answer

A) In a barter system,it is difficult to keep track of the relative values of goods and services. 
B) In a barter system,an individual offers money to import goods and services. 
C) In a barter system,an individual offers currency notes to get coins. 
D) In a barter system,different kinds of money are exchanged for one another. 
E) In a barter system,individuals are self-sufficient. 
A) In a barter system,it is difficult to keep track of the relative values of goods and services. 
B) In a barter system,an individual offers money to import goods and services. 
C) In a barter system,an individual offers currency notes to get coins. 
D) In a barter system,different kinds of money are exchanged for one another. 
E) In a barter system,individuals are self-sufficient.

Question 10

The reserve ratio is the ratio of:

Accepted Answer

A) Federal Reserve member banks to nonmember banks. 
B) Federal Reserve nonmember banks to member banks. 
C) Federal Reserve member banks to all U.S.banks. 
D) a bank's total deposits to its reserves. 
E) a bank's reserves to its total deposits. 
A) Federal Reserve member banks to nonmember banks. 
B) Federal Reserve nonmember banks to member banks. 
C) Federal Reserve member banks to all U.S.banks. 
D) a bank's total deposits to its reserves. 
E) a bank's reserves to its total deposits.

Question 11

The first step in the evolution of money involved the use of _____.

Accepted Answer

A) physical commodities 
B) barter 
C) pieces of paper representing claims on physical commodities 
D) pieces of paper with no intrinsic value 
E) electronic entries representing claims on pieces of paper with no intrinsic value 
A) physical commodities 
B) barter 
C) pieces of paper representing claims on physical commodities 
D) pieces of paper with no intrinsic value 
E) electronic entries representing claims on pieces of paper with no intrinsic value

Question 12

Money that is acceptable because the government requires that it be accepted in payment of debt is _____.

Accepted Answer

A) legal tender 
B) commodity money 
C) bad money 
D) backed by government's wealth 
E) hoarded by the people 
A) legal tender 
B) commodity money 
C) bad money 
D) backed by government's wealth 
E) hoarded by the people

Question 13

Which of the following is true if a nation's official money fails to serve as a medium of exchange?​

Accepted Answer

A) Nothing will replace money to help facilitate exchange. 
B) There will be an increase in economic efficiency. 
C) Resources will divert from production to exchange. 
D) Transactions costs of exchange will decrease. 
E) Fewer barter exchanges will be completed. 
A) Nothing will replace money to help facilitate exchange. 
B) There will be an increase in economic efficiency. 
C) Resources will divert from production to exchange. 
D) Transactions costs of exchange will decrease. 
E) Fewer barter exchanges will be completed.

Question 14

The more specialized labor becomes,the:

Accepted Answer

A) less likely it is that a double coincidence of wants will exist,and the less likely it is that monetary exchange will develop. 
B) less likely it is that a double coincidence of wants will exist,and the more likely it is that monetary exchange will develop. 
C) more likely it is that a double coincidence of wants will exist,and the less likely it is that monetary exchange will develop. 
D) more likely it is that a double coincidence of wants will exist,and the more likely it is that monetary exchange will develop. 
E) more likely it is that the individual is producing only what he or she wants to consume. 
A) less likely it is that a double coincidence of wants will exist,and the less likely it is that monetary exchange will develop. 
B) less likely it is that a double coincidence of wants will exist,and the more likely it is that monetary exchange will develop. 
C) more likely it is that a double coincidence of wants will exist,and the less likely it is that monetary exchange will develop. 
D) more likely it is that a double coincidence of wants will exist,and the more likely it is that monetary exchange will develop. 
E) more likely it is that the individual is producing only what he or she wants to consume.

Question 15

People came to accept fiat money because they believed that others would accept it as well.

Accepted Answer

A) True 
 B)False

Question 16

Between 1930 and 1933,many banks in the U.S.failed because:

Accepted Answer

A) the FDIC moved too slowly to prevent the bank failures. 
B) most bankers were either corrupt or incompetent. 
C) of excessive regulation by the federal government. 
D) people shifted their funds to take advantage of rising stock market prices. 
E) people lost confidence in them. 
A) the FDIC moved too slowly to prevent the bank failures. 
B) most bankers were either corrupt or incompetent. 
C) of excessive regulation by the federal government. 
D) people shifted their funds to take advantage of rising stock market prices. 
E) people lost confidence in them.

Question 17

A subprime mortgage is:

Accepted Answer

A) a mortgage in which the borrower gets an interest rate below the prime rate. 
B) a mortgage in which the interest rate is adjustable. 
C) a mortgage for which the home is valued below its true market value. 
D) a mortgage in which the borrower has a poor credit rating. 
E) a mortgage for a home that was in foreclosure. 
A) a mortgage in which the borrower gets an interest rate below the prime rate. 
B) a mortgage in which the interest rate is adjustable. 
C) a mortgage for which the home is valued below its true market value. 
D) a mortgage in which the borrower has a poor credit rating. 
E) a mortgage for a home that was in foreclosure.

Question 18

Money does not solve the double coincidence of wants problem unless it is generally acceptable.

Accepted Answer

A) True 
 B)False

Question 19

Thousands of U.S.banks failed in the 1930s because the Fed loaned too many reserves to member banks.

Accepted Answer

A) True 
 B)False

Question 20

Commodity money is something:

Accepted Answer

A) that has no intrinsic value. 
B) that has an intrinsic value. 
C) that is based on a valuable metal. 
D) whose value never changes. 
E) whose value cannot be determined. 
A) that has no intrinsic value. 
B) that has an intrinsic value. 
C) that is based on a valuable metal. 
D) whose value never changes. 
E) whose value cannot be determined.

Which of the following statements is true of a barter system?

Which of the following statements is true of open-market operations?

Which of the following is not performed by the Fed?

Barter may be the only alternative:

Whatever serves as a medium of exchange is:

How does money function as a unit of account?

Alan puts $20,000 in an uninsured savings account at the Boston National Bank.Susie borrows $20,000 from the Boston National Bank,flies to a Central African country,and is never heard from again.Which of the following is true in this case?

Which of the following is true of the unit of account function of money?

Which of the following statements is true of a barter system?

The reserve ratio is the ratio of:

The first step in the evolution of money involved the use of _____.

Money that is acceptable because the government requires that it be accepted in payment of debt is _____.

Which of the following is true if a nation's official money fails to serve as a medium of exchange?

The more specialized labor becomes,the:

People came to accept fiat money because they believed that others would accept it as well.

Between 1930 and 1933,many banks in the U.S.failed because:

A subprime mortgage is:

Money does not solve the double coincidence of wants problem unless it is generally acceptable.

Thousands of U.S.banks failed in the 1930s because the Fed loaned too many reserves to member banks.

Commodity money is something:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 13: Money and the Financial System

Which of the following statements is true of a barter system?

Which of the following statements is true of open-market operations?

Which of the following is not performed by the Fed?

Barter may be the only alternative:

Whatever serves as a medium of exchange is:​

How does money function as a unit of account?​

Alan puts $20,000 in an uninsured savings account at the Boston National Bank.Susie borrows $20,000 from the Boston National Bank,flies to a Central African country,and is never heard from again.Which of the following is true in this case?

Which of the following is true of the unit of account function of money?

Which of the following statements is true of a barter system?

The reserve ratio is the ratio of:

The first step in the evolution of money involved the use of _____.

Money that is acceptable because the government requires that it be accepted in payment of debt is _____.

Which of the following is true if a nation's official money fails to serve as a medium of exchange?​

The more specialized labor becomes,the:

People came to accept fiat money because they believed that others would accept it as well.

Between 1930 and 1933,many banks in the U.S.failed because:

A subprime mortgage is:

Money does not solve the double coincidence of wants problem unless it is generally acceptable.

Thousands of U.S.banks failed in the 1930s because the Fed loaned too many reserves to member banks.

Commodity money is something:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Whatever serves as a medium of exchange is:

How does money function as a unit of account?

Which of the following is true if a nation's official money fails to serve as a medium of exchange?