Question 1

In the 1980s, some states in the United States had significantly more bank failures than other states. What industries did the former states depend on heavily?

Accepted Answer

A)  Oil and agriculture 
B)  Tourism 
C)  Defense and aeronautics 
D)  Construction and textiles 
E)  The computer industry 
A)  Oil and agriculture 
B)  Tourism 
C)  Defense and aeronautics 
D)  Construction and textiles 
E)  The computer industry

Question 2

In the 1980s, the number of bank failures increased dramatically in the United States, most of which were uninsured.

Accepted Answer

A) True 
 B)False

Question 3

According to Gresham's Law:

Accepted Answer

A)  money with relatively high intrinsic value will be used for transactions. 
B)  money with relatively low intrinsic value will be used for transactions. 
C)  money with relatively high intrinsic value will cause inflation. 
D)  money with relatively low intrinsic value will cause inflation. 
E)  inflation increases the intrinsic value of money. 
A)  money with relatively high intrinsic value will be used for transactions. 
B)  money with relatively low intrinsic value will be used for transactions. 
C)  money with relatively high intrinsic value will cause inflation. 
D)  money with relatively low intrinsic value will cause inflation. 
E)  inflation increases the intrinsic value of money.

Question 4

The table given below shows the components of money supply in an economy.
Table 12.1
 $\begin{array}{|l|c|}
\hline {\text { Money Component }} & \text { Amount (in millions) } \
\hline \text { Currency } & \$ 550 \
\text { Travelers' Checks } & \$ 20 \
\text { Savings Deposits } & \$ 180 \
\text { NOW Accounts } & \$ 185 \
\text { Small-Denomination Time Deposits } & \$ 620 \
\text { Retail Money Market Mutual Funds } & \$ 605 \
\text { ATS Accounts } & \$ 180 \
\text { Demand Deposits } & \$ 210 \
\hline
\end{array}$
-Refer to Table 12.1 and calculate the value of M1.

Accepted Answer

A)  $550 million 
B)  $570 million 
C)  $780 million 
D)  $1,125 million 
E)  $1,145 million 
A)  $550 million 
B)  $570 million 
C)  $780 million 
D)  $1,125 million 
E)  $1,145 million

Question 5

By Gresham's law, commodity money will always drive out fiduciary money.

Accepted Answer

A) True 
 B)False

In the 1980s, some states in the United States had significantly more bank failures than other states. What industries did the former states depend on heavily?

In the 1980s, the number of bank failures increased dramatically in the United States, most of which were uninsured.

According to Gresham's Law:

By Gresham's law, commodity money will always drive out fiduciary money.

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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Exam 12: Money and Banking

In the 1980s, some states in the United States had significantly more bank failures than other states. What industries did the former states depend on heavily?

In the 1980s, the number of bank failures increased dramatically in the United States, most of which were uninsured.

According to Gresham's Law:

By Gresham's law, commodity money will always drive out fiduciary money.

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters