Exam 2: Money and the Monetary System

Mortgage-backed securities have mortgage loan pools as their backing.

Real output in an economy may be expressed as the ratio of _____________.

_____________ is a short-term unsecured promissory note issued by a high credit-quality corporation with maturities of one to three months in length with an active secondary money.

A rise in prices not offset by increases in quality is called:

Representative full-bodied money consists of paper money fully backed by a precious metal.

Fiat money is paper money fully backed by a precious metal such as gold.

Checks may be cleared by:

The velocity of money measures the rate of circulation of online currencies in the modern economy.

Representative full-bodied money is paper money fully backed by a precious metal such as gold.

The supply of a currency in international markets depends largely on the:

Which of the following statements are correct?

Demand deposits are issued by commercial banks and savings banks, and do not earn interest.

Which of the following are not depository institutions?

____________ are debt instruments or securities with maturities of one year or less and have low default risk and high liquidity.

The two basic components of the U.S. money supply are physical money and deposit money.

M1 includes currency and demand deposits but excludes travelers' checks.

_____________ are very short-term loans, usually with maturities of one day to one week made between depository institutions.

A bimetallic standard is a monetary standard based only on gold.

Purchasing power is increased by inflation.

About 30 cities and towns in the United States print their own versions of money.