Question 1

Which of the following is the most liquid store of purchasing power?

Accepted Answer

A) A dollar bill. 
B) Common stock. 
C) Gold. 
D) Real estate. 
A) A dollar bill. 
B) Common stock. 
C) Gold. 
D) Real estate.

Question 2

The use of a dollar bill to buy a concert ticket represents the function of money as a:

Accepted Answer

A) medium of exchange. 
B) unit of account. 
C) store of value. 
D) all of these. 
A) medium of exchange. 
B) unit of account. 
C) store of value. 
D) all of these.

Question 3

The Monetary Control Act of 1980:

Accepted Answer

A) extended the Fed's authority to impose required-reserve ratios on all depository institutions. 
B) excluded the required-reserve ratios as an instrument of short-term policy. 
C) provided the Fed with the authority to use open market operations. 
D) all of the above. 
E) none of the above. 
A) extended the Fed's authority to impose required-reserve ratios on all depository institutions. 
B) excluded the required-reserve ratios as an instrument of short-term policy. 
C) provided the Fed with the authority to use open market operations. 
D) all of the above. 
E) none of the above.

Question 4

The Fed's principal decision-making body, which directs buying and selling U. S. government securities, is known as the:

Accepted Answer

A) Federal Deposit Insurance Corporation. 
B) District Board of Governors. 
C) Federal Open Market Committee. 
D) Reserve Requirement Regulation Conference. 
A) Federal Deposit Insurance Corporation. 
B) District Board of Governors. 
C) Federal Open Market Committee. 
D) Reserve Requirement Regulation Conference.

Question 5

Comparing how many dollars it takes to attend college each year to annual earnings on a job represents the use of money as a:

Accepted Answer

A) medium of exchange. 
B) unit of account. 
C) store of value. 
D) store of coincidence. 
A) medium of exchange. 
B) unit of account. 
C) store of value. 
D) store of coincidence.

Question 6

The Federal Reserve's primary function is to control the money supply.

Accepted Answer

A) True 
 B)False

Question 7

In the United States, the money supply (M1)consists of:

Accepted Answer

A) paper currency and coins. 
B) coins, paper currency, checkable deposits, and traveler's checks. 
C) paper currency, coins, checkable deposits, and savings deposits. 
D) government bonds, currency, checkable deposits, and traveler's checks. 
A) paper currency and coins. 
B) coins, paper currency, checkable deposits, and traveler's checks. 
C) paper currency, coins, checkable deposits, and savings deposits. 
D) government bonds, currency, checkable deposits, and traveler's checks.

Question 8

Which of the following items is included when computing M1?

Accepted Answer

A) Checking accounting entries. 
B) Currency in circulation. 
C) All of the above. 
D) None of the above. 
A) Checking accounting entries. 
B) Currency in circulation. 
C) All of the above. 
D) None of the above.

Question 9

The number of presidentially appointed members who sit on the Federal Reserve Board of Governors is:

Accepted Answer

A) none. 
B) seven. 
C) nine. 
D) twelve. 
A) none. 
B) seven. 
C) nine. 
D) twelve.

Question 10

The Federal Reserve System was founded in:

Accepted Answer

A) 1913. 
B) 1929. 
C) 1933. 
D) 1935. 
A) 1913. 
B) 1929. 
C) 1933. 
D) 1935.

Question 11

Which of the following is the most important protection against fears of bank collapse?

Accepted Answer

A) The Federal Reserve. 
B) The Federal Reserve Open Market Committee. 
C) The Federal Deposit Insurance Corporation. 
D) The gold and silver that backs Federal Reserve notes. 
A) The Federal Reserve. 
B) The Federal Reserve Open Market Committee. 
C) The Federal Deposit Insurance Corporation. 
D) The gold and silver that backs Federal Reserve notes.

Question 12

Which of the following institutions is responsible for supervising the banking system of the United States?

Accepted Answer

A) The Federal Reserve System. 
B) The Open Market Committee. 
C) The U.S. Treasury. 
D) The Federal Deposit Insurance Corporation. 
A) The Federal Reserve System. 
B) The Open Market Committee. 
C) The U.S. Treasury. 
D) The Federal Deposit Insurance Corporation.

Question 13

The M1 definition of the money supply includes currency,

Accepted Answer

A) checkable deposits, and savings accounts. 
B) checkable deposits, and credit cards. 
C) checkable deposits, and debit cards. 
D) and checkable deposits. 
A) checkable deposits, and savings accounts. 
B) checkable deposits, and credit cards. 
C) checkable deposits, and debit cards. 
D) and checkable deposits.

Question 14

Are outstanding credit card balances counted as part of the money supply?

Accepted Answer

A) Yes; they are used to purchase things, and therefore, they are included in the money supply figures. 
B) No; money is an asset, while the credit card balances are a liability. Thus, they are not included in the money supply figures. 
C) Partly; credit card balances of $100 or less are included in the M1 money supply, but the money supply figures do not include balances in excess of $100. 
D) Partly; credit card balances are included in the M1 money supply, but not the M2 money supply. 
A) Yes; they are used to purchase things, and therefore, they are included in the money supply figures. 
B) No; money is an asset, while the credit card balances are a liability. Thus, they are not included in the money supply figures. 
C) Partly; credit card balances of $100 or less are included in the M1 money supply, but the money supply figures do not include balances in excess of $100. 
D) Partly; credit card balances are included in the M1 money supply, but not the M2 money supply.

Which of the following is the most liquid store of purchasing power?

The use of a dollar bill to buy a concert ticket represents the function of money as a:

The Monetary Control Act of 1980:

The Fed's principal decision-making body, which directs buying and selling U. S. government securities, is known as the:

Comparing how many dollars it takes to attend college each year to annual earnings on a job represents the use of money as a:

The Federal Reserve's primary function is to control the money supply.

In the United States, the money supply (M1)consists of:

Which of the following items is included when computing M1?

The number of presidentially appointed members who sit on the Federal Reserve Board of Governors is:

The Federal Reserve System was founded in:

Which of the following is the most important protection against fears of bank collapse?

Which of the following institutions is responsible for supervising the banking system of the United States?

The M1 definition of the money supply includes currency,

Are outstanding credit card balances counted as part of the money supply?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Filters

Exam 14: Money and the Federal Reserve System

Which of the following is the most liquid store of purchasing power?

The use of a dollar bill to buy a concert ticket represents the function of money as a:

The Monetary Control Act of 1980:

The Fed's principal decision-making body, which directs buying and selling U. S. government securities, is known as the:

Comparing how many dollars it takes to attend college each year to annual earnings on a job represents the use of money as a:

The Federal Reserve's primary function is to control the money supply.

In the United States, the money supply (M1)consists of:

Which of the following items is included when computing M1?

The number of presidentially appointed members who sit on the Federal Reserve Board of Governors is:

The Federal Reserve System was founded in:

Which of the following is the most important protection against fears of bank collapse?

Which of the following institutions is responsible for supervising the banking system of the United States?

The M1 definition of the money supply includes currency,

Are outstanding credit card balances counted as part of the money supply?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Filters