Question 1

Which of the following best illustrates the double coincidence of wants?

Accepted Answer

A)  Both Tom and Jerry would like to purchase the same good. 
B)  Tom has something he's willing to trade with Jerry; Jerry has something he's not willing to trade with Tom. 
C)  Tom and Jerry have very similar tastes; hence, Tom's wants coincide with Jerry's. 
D)  Tom has something he's willing to trade with Jerry, who wants it; Jerry has something he's willing to trade with Tom, who wants it. 
E)  Tom has something Jerry wants; Jerry has nothing Tom wants. 
A)  Both Tom and Jerry would like to purchase the same good. 
B)  Tom has something he's willing to trade with Jerry; Jerry has something he's not willing to trade with Tom. 
C)  Tom and Jerry have very similar tastes; hence, Tom's wants coincide with Jerry's. 
D)  Tom has something he's willing to trade with Jerry, who wants it; Jerry has something he's willing to trade with Tom, who wants it. 
E)  Tom has something Jerry wants; Jerry has nothing Tom wants.

Question 2

As a result of the financial crises in 2008, the number of banks in the United States declined from about 18,000 in 1984 to about _____ in 2015.

Accepted Answer

A)  15,000 
B)  10,000 
C)  8,900 
D)  6,500 
E)  5,000 
A)  15,000 
B)  10,000 
C)  8,900 
D)  6,500 
E)  5,000

Question 3

The chair of the Board of Governors of the Fed serves _____

Accepted Answer

A)  a two-year term that coincides with that of members of Congress. 
B)  a four-year term. 
C)  a seven-year term. 
D)  a fourteen-year term. 
E)  a six-year term. 
A)  a two-year term that coincides with that of members of Congress. 
B)  a four-year term. 
C)  a seven-year term. 
D)  a fourteen-year term. 
E)  a six-year term.

Question 4

The law that established the Federal Reserve System is the _____

Accepted Answer

A)  Federal Reserve Act of 1913. 
B)  National Banking Act of 1863. 
C)  Banking Act of 1933. 
D)  National Banking Act of 1813. 
E)  Federal Reserve Act of 1963. 
A)  Federal Reserve Act of 1913. 
B)  National Banking Act of 1863. 
C)  Banking Act of 1933. 
D)  National Banking Act of 1813. 
E)  Federal Reserve Act of 1963.

Question 5

If the purchasing power of a dollar measured in terms of the base year was $0.41, what was the price index?

Accepted Answer

A)  238 
B)  244 
C)  41 
D)  42 
E)  100 
A)  238 
B)  244 
C)  41 
D)  42 
E)  100

Question 6

Which of the following is correct regarding the discount rate?

Accepted Answer

A)  It is the interest rate that commercial banks charge their most creditworthy customers. 
B)  It is the interest rate that thrift institutions charge for home mortgages. 
C)  It is the interest rate at which depository institutions can borrow from the Federal Reserve. 
D)  It is the interest rate set in the market for U.S. Treasury Bills. 
E)  It is the prime interest rate. 
A)  It is the interest rate that commercial banks charge their most creditworthy customers. 
B)  It is the interest rate that thrift institutions charge for home mortgages. 
C)  It is the interest rate at which depository institutions can borrow from the Federal Reserve. 
D)  It is the interest rate set in the market for U.S. Treasury Bills. 
E)  It is the prime interest rate.

Question 7

A money-market mutual fund account is a(n) _____

Accepted Answer

A)  checking account that earns interest. 
B)  savings account against which one can write checks. 
C)  group of stocks sold under one name. 
D)  claim on a collection of interest-earning assets that is not guaranteed by the FDIC. 
E)  account with which the Fed buys and sells U.S. government securities. 
A)  checking account that earns interest. 
B)  savings account against which one can write checks. 
C)  group of stocks sold under one name. 
D)  claim on a collection of interest-earning assets that is not guaranteed by the FDIC. 
E)  account with which the Fed buys and sells U.S. government securities.

Question 8

Which of the following statements is true of a barter system?

Accepted Answer

A)  In a barter system economy, no rates of exchange are defined. 
B)  In a barter system economy, there are as many different rates of exchange as there are pairs of goods to trade. 
C)  In a barter system economy, rates of exchange are expressed in goods per dollar. 
D)  In a barter system economy, rates of exchange are expressed in dollars per good. 
E)  In a barter system economy, rates of exchange are denominated in gold or silver. 
A)  In a barter system economy, no rates of exchange are defined. 
B)  In a barter system economy, there are as many different rates of exchange as there are pairs of goods to trade. 
C)  In a barter system economy, rates of exchange are expressed in goods per dollar. 
D)  In a barter system economy, rates of exchange are expressed in dollars per good. 
E)  In a barter system economy, rates of exchange are denominated in gold or silver.

Question 9

The United States has a _____ consisting of state banks and national banks.

Accepted Answer

A)  central banking system. 
B)  federal banking system. 
C)  chartered banking system. 
D)  free banking system. 
E)  dual banking system. 
A)  central banking system. 
B)  federal banking system. 
C)  chartered banking system. 
D)  free banking system. 
E)  dual banking system.

Question 10

Federal Reserve notes are _____

Accepted Answer

A)  checks. 
B)  commodity money. 
C)  coins. 
D)  backed by gold. 
E)  fiat money. 
A)  checks. 
B)  commodity money. 
C)  coins. 
D)  backed by gold. 
E)  fiat money.

Question 11

Which of the following was the earliest type of money?

Accepted Answer

A)  coins 
B)  barter 
C)  commodity money 
D)  token money 
E)  fiat money 
A)  coins 
B)  barter 
C)  commodity money 
D)  token money 
E)  fiat money

Question 12

Barter works best when _____

Accepted Answer

A)  there is an absence of a double coincidence of wants. 
B)  many different products are available in the economy. 
C)  money is readily available to establish relative prices. 
D)  each trader has what the other wants and wants what the other has. 
E)  highly developed economies achieve extensive specialization of labor. 
A)  there is an absence of a double coincidence of wants. 
B)  many different products are available in the economy. 
C)  money is readily available to establish relative prices. 
D)  each trader has what the other wants and wants what the other has. 
E)  highly developed economies achieve extensive specialization of labor.

Question 13

The reserve requirement refers to _____

Accepted Answer

A)  the fraction of deposits that banks are required by the Fed to hold as reserves. 
B)  the amount of gold required to back up all Federal Reserve notes. 
C)  the requirement that banks reserve part of their lending capacity for small businesses. 
D)  the requirement that Reserve bank presidents be part of the FOMC. 
E)  the Treasury deposits held by the Fed. 
A)  the fraction of deposits that banks are required by the Fed to hold as reserves. 
B)  the amount of gold required to back up all Federal Reserve notes. 
C)  the requirement that banks reserve part of their lending capacity for small businesses. 
D)  the requirement that Reserve bank presidents be part of the FOMC. 
E)  the Treasury deposits held by the Fed.

Question 14

Each member of the Federal Reserve's Board of Governors is appointed for life.

Accepted Answer

A) True 
 B)False

Question 15

If the purchasing power of a dollar measured in terms of the base year was $0.42, what was the price index?

Accepted Answer

A)  238 
B)  244 
C)  41 
D)  42 
E)  100 
A)  238 
B)  244 
C)  41 
D)  42 
E)  100

Question 16

One purpose of interest-rate ceilings was to _____

Accepted Answer

A)  establish a ceiling on bank profits. 
B)  establish a floor on bank profits. 
C)  encourage competition in other areas. 
D)  eliminate the need for the FDIC. 
E)  reduce the chance of bank failures. 
A)  establish a ceiling on bank profits. 
B)  establish a floor on bank profits. 
C)  encourage competition in other areas. 
D)  eliminate the need for the FDIC. 
E)  reduce the chance of bank failures.

Question 17

Which act repealed some Depression-era restrictions on the kinds of assets a bank could own?

Accepted Answer

A)  the Gramm-Leach-Bliley Act of 1999 
B)  the Dodd-Frank Act of 2010 
C)  the Garn-St. Germain Act of 1982 
D)  the Sarbanes-Oxley Act of 2002 
E)  the National Banking Act of 1863 
A)  the Gramm-Leach-Bliley Act of 1999 
B)  the Dodd-Frank Act of 2010 
C)  the Garn-St. Germain Act of 1982 
D)  the Sarbanes-Oxley Act of 2002 
E)  the National Banking Act of 1863

Question 18

Specialization of labor means that _____

Accepted Answer

A)  production requires a special kind of labor. 
B)  the overall skill level of labor is increasing over time. 
C)  individuals produce goods that they are relatively good at producing and trade for those that they do not produce. 
D)  individuals achieve self-sufficiency in production by producing all the goods that they require. 
E)  exchange within the economy consists of trading in services. 
A)  production requires a special kind of labor. 
B)  the overall skill level of labor is increasing over time. 
C)  individuals produce goods that they are relatively good at producing and trade for those that they do not produce. 
D)  individuals achieve self-sufficiency in production by producing all the goods that they require. 
E)  exchange within the economy consists of trading in services.

Question 19

Institutions that serve as go-betweens by borrowing from people who have saved to make loans to others are known as _____

Accepted Answer

A)  stock markets. 
B)  bond markets. 
C)  financial markets. 
D)  financial intermediaries. 
E)  government agencies. 
A)  stock markets. 
B)  bond markets. 
C)  financial markets. 
D)  financial intermediaries. 
E)  government agencies.

Question 20

Alan puts $20,000 in an uninsured savings account at the Boston National Bank. Susie borrows $20,000 from the Boston National Bank, flies to a Central African country, and is never heard from again. Which of the following is true in this case?

Accepted Answer

A)  Alan will lose his $20,000 because he did not provide any security. 
B)  Alan will lose his $20,000 if he and Susie are related. 
C)  Alan will lose his $20,000 if the Boston National Bank makes all of its loans to people who run off to South Pacific islands. 
D)  Alan will not lose his $20,000 no matter what happens to the Boston National Bank. 
E)  Alan will not lose his $20,000 because the Fed will return the amount to him. 
A)  Alan will lose his $20,000 because he did not provide any security. 
B)  Alan will lose his $20,000 if he and Susie are related. 
C)  Alan will lose his $20,000 if the Boston National Bank makes all of its loans to people who run off to South Pacific islands. 
D)  Alan will not lose his $20,000 no matter what happens to the Boston National Bank. 
E)  Alan will not lose his $20,000 because the Fed will return the amount to him.

Which of the following best illustrates the double coincidence of wants?

As a result of the financial crises in 2008, the number of banks in the United States declined from about 18,000 in 1984 to about _____ in 2015.

The chair of the Board of Governors of the Fed serves _____

The law that established the Federal Reserve System is the _____

If the purchasing power of a dollar measured in terms of the base year was $0.41, what was the price index?

Which of the following is correct regarding the discount rate?

A money-market mutual fund account is a(n) _____

Which of the following statements is true of a barter system?

The United States has a _____ consisting of state banks and national banks.

Federal Reserve notes are _____

Which of the following was the earliest type of money?

Barter works best when _____

The reserve requirement refers to _____

Each member of the Federal Reserve's Board of Governors is appointed for life.

If the purchasing power of a dollar measured in terms of the base year was $0.42, what was the price index?

One purpose of interest-rate ceilings was to _____

Which act repealed some Depression-era restrictions on the kinds of assets a bank could own?

Specialization of labor means that _____

Institutions that serve as go-betweens by borrowing from people who have saved to make loans to others are known as _____

Alan puts $20,000 in an uninsured savings account at the Boston National Bank. Susie borrows $20,000 from the Boston National Bank, flies to a Central African country, and is never heard from again. Which of the following is true in this case?

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exam 13: Money and the Financial System.

Which of the following best illustrates the double coincidence of wants?

As a result of the financial crises in 2008, the number of banks in the United States declined from about 18,000 in 1984 to about _____ in 2015.

The chair of the Board of Governors of the Fed serves _____

The law that established the Federal Reserve System is the _____

If the purchasing power of a dollar measured in terms of the base year was $0.41, what was the price index?

Which of the following is correct regarding the discount rate?

A money-market mutual fund account is a(n) _____

Which of the following statements is true of a barter system?

The United States has a _____ consisting of state banks and national banks.

Federal Reserve notes are _____

Which of the following was the earliest type of money?

Barter works best when _____

The reserve requirement refers to _____

Each member of the Federal Reserve's Board of Governors is appointed for life.

If the purchasing power of a dollar measured in terms of the base year was $0.42, what was the price index?

One purpose of interest-rate ceilings was to _____

Which act repealed some Depression-era restrictions on the kinds of assets a bank could own?

Specialization of labor means that _____

Institutions that serve as go-betweens by borrowing from people who have saved to make loans to others are known as _____

Alan puts $20,000 in an uninsured savings account at the Boston National Bank. Susie borrows $20,000 from the Boston National Bank, flies to a Central African country, and is never heard from again. Which of the following is true in this case?

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters