Question 1

A breakdown in the international gold standard occurred during

Accepted Answer

A)  the 1880-1914 period 
B)  World War I 
C)  World War II 
D)  the depression of the 1930s 
A)  the 1880-1914 period 
B)  World War I 
C)  World War II 
D)  the depression of the 1930s

Question 2

Fiat money generally becomes worthless if the issuing government - such as the Confederate government of the Civil War - fails.

Accepted Answer

A) True 
 B)False

Question 3

A major factor in the severity of the 2007-09 financial crisis was the massive amounts of debt taken on by:

Accepted Answer

A)  individuals 
B)  business in Europe 
C)  governments in South America 
D)  Asian productivity gains 
A)  individuals 
B)  business in Europe 
C)  governments in South America 
D)  Asian productivity gains

Question 4

Gold is part of the M1 money supply.

Accepted Answer

A) True 
 B)False

Question 5

Savings accounts are included in which of the following money supply definitions?

Accepted Answer

A)  M0 
B)  M1 
C)  M2 
D)  Mx 
A)  M0 
B)  M1 
C)  M2 
D)  Mx

Question 6

An individual bank can create money.

Accepted Answer

A) True 
 B)False

Question 7

Credit card usage:

Accepted Answer

A)  may expand money supply 
B)  may contract the money supply 
C)  neither expands nor contracts money supply 
D)  isn't considered by economists in the economic activity 
A)  may expand money supply 
B)  may contract the money supply 
C)  neither expands nor contracts money supply 
D)  isn't considered by economists in the economic activity

Question 8

"Continentals" were backed by

Accepted Answer

A)  gold 
B)  silver 
C)  possible future tax revenues 
D)  none of the above 
A)  gold 
B)  silver 
C)  possible future tax revenues 
D)  none of the above

Question 9

The advantages claimed for a bimetallic standard were not gained in actual practice because

Accepted Answer

A)  one of the metals disappeared from circulation because the mint and market ratios were not the same 
B)  the supply of gold was inadequate 
C)  the supply of silver and gold was not balanced among the nations that were on a bimetallic standard 
D)  The U.S. went to war 
A)  one of the metals disappeared from circulation because the mint and market ratios were not the same 
B)  the supply of gold was inadequate 
C)  the supply of silver and gold was not balanced among the nations that were on a bimetallic standard 
D)  The U.S. went to war

Question 10

Money decreed to be "legal tender" for the payment of debts is money backed by

Accepted Answer

A)  precious metals 
B)  commodities 
C)  government creditworthiness 
D)  gold or silver 
A)  precious metals 
B)  commodities 
C)  government creditworthiness 
D)  gold or silver

Question 11

Gross domestic output (GDO) is a measure of the output of goods and services in an economy.

Accepted Answer

A) True 
 B)False

Question 12

Banker's acceptances are used to finance international trade.

Accepted Answer

A) True 
 B)False

Question 13

A central bank defines and regulates the amount of the money supply in the financial system.

Accepted Answer

A) True 
 B)False

Question 14

All of the following are normally categorized as financial institutions except

Accepted Answer

A)  S&Ls 
B)  brokerage firms 
C)  commercial banks 
D)  credit unions 
A)  S&Ls 
B)  brokerage firms 
C)  commercial banks 
D)  credit unions

Question 15

Federal funds are very short-term loans made between depository institutions.

Accepted Answer

A) True 
 B)False

Question 16

Credit money includes:

Accepted Answer

A)  checking accounts at commercial banks 
B)  checkable deposits at savings and loan associations 
C)  checking accounts at credit unions 
D)  all the above 
A)  checking accounts at commercial banks 
B)  checkable deposits at savings and loan associations 
C)  checking accounts at credit unions 
D)  all the above

Question 17

The faster velocity of money, the greater an economy's GDP.

Accepted Answer

A) True 
 B)False

Question 18

According to the Bretton Woods agreement, one ounce of gold is set equal to US $35, and each participating country pegs its currency to gold or the U.S. dollar.

Accepted Answer

A) True 
 B)False

Question 19

An international gold standard dominated international trade during:

Accepted Answer

A)  World War II 
B)  1880-1914 
C)  1944-1971 
D)  1914-1932 
A)  World War II 
B)  1880-1914 
C)  1944-1971 
D)  1914-1932

Question 20

Fiat money is a form of credit money.

Accepted Answer

A) True 
 B)False

A breakdown in the international gold standard occurred during

Fiat money generally becomes worthless if the issuing government - such as the Confederate government of the Civil War - fails.

A major factor in the severity of the 2007-09 financial crisis was the massive amounts of debt taken on by:

Gold is part of the M1 money supply.

Savings accounts are included in which of the following money supply definitions?

An individual bank can create money.

Credit card usage:

"Continentals" were backed by

The advantages claimed for a bimetallic standard were not gained in actual practice because

Money decreed to be "legal tender" for the payment of debts is money backed by

Gross domestic output (GDO) is a measure of the output of goods and services in an economy.

Banker's acceptances are used to finance international trade.

A central bank defines and regulates the amount of the money supply in the financial system.

All of the following are normally categorized as financial institutions except

Federal funds are very short-term loans made between depository institutions.

Credit money includes:

The faster velocity of money, the greater an economy's GDP.

According to the Bretton Woods agreement, one ounce of gold is set equal to US $35, and each participating country pegs its currency to gold or the U.S. dollar.

An international gold standard dominated international trade during:

Fiat money is a form of credit money.

The Financial Environment

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 2: Money and the Monetary System

A breakdown in the international gold standard occurred during

Fiat money generally becomes worthless if the issuing government - such as the Confederate government of the Civil War - fails.

A major factor in the severity of the 2007-09 financial crisis was the massive amounts of debt taken on by:

Gold is part of the M1 money supply.

Savings accounts are included in which of the following money supply definitions?

An individual bank can create money.

Credit card usage:

"Continentals" were backed by

The advantages claimed for a bimetallic standard were not gained in actual practice because

Money decreed to be "legal tender" for the payment of debts is money backed by

Gross domestic output (GDO) is a measure of the output of goods and services in an economy.

Banker's acceptances are used to finance international trade.

A central bank defines and regulates the amount of the money supply in the financial system.

All of the following are normally categorized as financial institutions except

Federal funds are very short-term loans made between depository institutions.

Credit money includes:

The faster velocity of money, the greater an economy's GDP.

According to the Bretton Woods agreement, one ounce of gold is set equal to US $35, and each participating country pegs its currency to gold or the U.S. dollar.

An international gold standard dominated international trade during:

Fiat money is a form of credit money.

The Financial Environment

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters