Question 1

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

Accepted Answer

A) Christine and Dyanne 
B) ​Eric and German 
C) ​Dyanne and Amanda 
D) ​Amanda and Eric 
A) Christine and Dyanne 
B) ​Eric and German 
C) ​Dyanne and Amanda 
D) ​Amanda and Eric

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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 4

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. 
A) a unit of account 
B) a store of value 
C) medium of exchange 
D) All of the above are correct.

Question 5

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 exchange 
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 exchange

Question 6

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. 
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.

Question 7

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 8

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. 
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.

Question 9

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

Accepted Answer

commodity

Question 10

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. 
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.

Question 11

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

Question 12

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

Accepted Answer

The president of the New York Federal Re

Question 13

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 14

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. 
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.

Question 15

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. 
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.

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. 
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.

Question 17

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 stocks 
A) cash and stocks 
B) cash but not stocks 
C) stocks but not cash 
D) neither cash nor stocks

Question 18

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. 
A) M1 but not M2. 
B) M2 but not M1. 
C) M1 and M2. 
D) neither M1 nor M2.

Question 19

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. 
A) a central bank. 
B) a charter bank. 
C) a national bank. 
D) a state bank.

Question 20

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 presidents 
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 presidents

Exam 29: The Monetary System

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

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

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?

Which of the following is a function of money?

Most financial assets other than money function as

To increase the money supply, the Fed can

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?

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

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

When there is a reserve requirement, banks

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

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

Which of the following is an example of barter?

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

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

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

Credit card limits are included in

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

Who can vote on Federal Open Market Committee decisions?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

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

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