Question 1

Using a good as a medium of exchange confers the benefit that

Accepted Answer

A)  the need to quote so many prices in trade is reduced. 
B)  the need for a double coincidence of wants is greatly increased. 
C)  the need for specialization is reduced. 
D)  transactions costs are increased, but they now may be paid in money terms. 
A)  the need to quote so many prices in trade is reduced. 
B)  the need for a double coincidence of wants is greatly increased. 
C)  the need for specialization is reduced. 
D)  transactions costs are increased, but they now may be paid in money terms.

Question 2

Which of the following is NOT on the Fed's list of the five most desirable outcomes for a payments system?

Accepted Answer

A)  inflation-proof 
B)  security 
C)  efficiency 
D)  speed 
A)  inflation-proof 
B)  security 
C)  efficiency 
D)  speed

Question 3

Which of the following is an example of fiat money?

Accepted Answer

A)  a cowry shell used as money on a South Pacific island 
B)  a gold coin used as money in nineteenth century England 
C)  a Federal Reserve Note used as money in the twenty-first century United States 
D)  a pound of salt used as money in medieval France 
A)  a cowry shell used as money on a South Pacific island 
B)  a gold coin used as money in nineteenth century England 
C)  a Federal Reserve Note used as money in the twenty-first century United States 
D)  a pound of salt used as money in medieval France

Question 4

All of the following are characteristics of debit cards EXCEPT

Accepted Answer

A)  payments are deferred until a later date. 
B)  they can be used like checks. 
C)  they eliminate the problem of trust since the bank's computer authorizes the transaction. 
D)  when used at a store, the user's bank instantly credits the store's account with the amount and deducts it from the user's account. 
A)  payments are deferred until a later date. 
B)  they can be used like checks. 
C)  they eliminate the problem of trust since the bank's computer authorizes the transaction. 
D)  when used at a store, the user's bank instantly credits the store's account with the amount and deducts it from the user's account.

Question 5

Barter is

Accepted Answer

A)  another name for money. 
B)  an exchange of goods and services directly for goods and services. 
C)  the basis for economic specialization. 
D)  the main system of exchange in the United States today. 
A)  another name for money. 
B)  an exchange of goods and services directly for goods and services. 
C)  the basis for economic specialization. 
D)  the main system of exchange in the United States today.

Question 6

Why does the payments system continue to change over time?

Accepted Answer

New forms of payments are intr

Question 7

The narrowest money measure is

Accepted Answer

A)  currency plus non-interest bearing checking accounts. 
B)  currency plus all checking accounts. 
C)  currency plus all deposits at financial institutions. 
D)  definitive money. 
A)  currency plus non-interest bearing checking accounts. 
B)  currency plus all checking accounts. 
C)  currency plus all deposits at financial institutions. 
D)  definitive money.

Question 8

A hyperinflation occurs when

Accepted Answer

A)  inflation persists for more than two years. 
B)  inflation persists for more than five years. 
C)  the inflation rate exceeds 50% per year. 
D)  the inflation rate exceeds 50% per month. 
A)  inflation persists for more than two years. 
B)  inflation persists for more than five years. 
C)  the inflation rate exceeds 50% per year. 
D)  the inflation rate exceeds 50% per month.

Question 9

Which of the following is the largest measure of money in the United States?

Accepted Answer

A)  Federal Reserve notes 
B)  definitive money 
C)  M1 
D)  M2 
A)  Federal Reserve notes 
B)  definitive money 
C)  M1 
D)  M2

Question 10

Evidence indicates that there's a strong relationship between money and inflation in

Accepted Answer

A)  both the short and long run. 
B)  neither the short nor the long run. 
C)  short run, but not the long run. 
D)  long run, but not the short run. 
A)  both the short and long run. 
B)  neither the short nor the long run. 
C)  short run, but not the long run. 
D)  long run, but not the short run.

Question 11

Since the year 2000,total currency in circulation

Accepted Answer

A)  has fallen by 20 percent. 
B)  has remained essentially the same. 
C)  has more than tripled. 
D)  has increased tenfold. 
A)  has fallen by 20 percent. 
B)  has remained essentially the same. 
C)  has more than tripled. 
D)  has increased tenfold.

Question 12

Under a barter system

Accepted Answer

A)  each good has many prices. 
B)  each good has a single price. 
C)  no prices for goods exist. 
D)  prices for goods are very stable. 
A)  each good has many prices. 
B)  each good has a single price. 
C)  no prices for goods exist. 
D)  prices for goods are very stable.

Question 13

Wealth is

Accepted Answer

A)  the sum of the value of assets. 
B)  equal to income. 
C)  a flow variable. 
D)  the sum of the value of assets minus the sum of the value of liabilities. 
A)  the sum of the value of assets. 
B)  equal to income. 
C)  a flow variable. 
D)  the sum of the value of assets minus the sum of the value of liabilities.

Question 14

If money is declared to be legal tender,it must be

Accepted Answer

A)  minted from a precious metal. 
B)  acceptable to citizens of foreign countries. 
C)  possible to exchange it for an equivalent amount of precious metal. 
D)  accepted to settle private transactions and it must be accepted for the payment of taxes. 
A)  minted from a precious metal. 
B)  acceptable to citizens of foreign countries. 
C)  possible to exchange it for an equivalent amount of precious metal. 
D)  accepted to settle private transactions and it must be accepted for the payment of taxes.

Question 15

What determines the acceptability of dollar bills as a medium of exchange?

Accepted Answer

A)  our society's willingness to use green paper notes issued by the Federal Reserve as money 
B)  the willingness of the Federal Reserve to redeem dollar bills for gold 
C)  the willingness of the U.S. Treasury to redeem dollar bills for gold 
D)  the public's fear that failing to accept dollar bills will trigger a hyperinflation 
A)  our society's willingness to use green paper notes issued by the Federal Reserve as money 
B)  the willingness of the Federal Reserve to redeem dollar bills for gold 
C)  the willingness of the U.S. Treasury to redeem dollar bills for gold 
D)  the public's fear that failing to accept dollar bills will trigger a hyperinflation

Question 16

When economists refer to the role of money as a standard of deferred payment,they mean that

Accepted Answer

A)  payments by checks are usually deferred until the checks clear the bank. 
B)  money earns interest while loan payments are deferred. 
C)  money provides a standard for payments that will occur in the future. 
D)  money today is worth less than money tomorrow. 
A)  payments by checks are usually deferred until the checks clear the bank. 
B)  money earns interest while loan payments are deferred. 
C)  money provides a standard for payments that will occur in the future. 
D)  money today is worth less than money tomorrow.

Question 17

According to a Federal Reserve study,electronic payments now make up ________ of all noncash payments.

Accepted Answer

A)  15 percent 
B)  just under half 
C)  more than two-thirds 
D)  just under 90 percent 
A)  15 percent 
B)  just under half 
C)  more than two-thirds 
D)  just under 90 percent

Question 18

Fiat money

Accepted Answer

A)  is money that would have no value if it were not usable as money. 
B)  is illegal in most advanced, industrial countries. 
C)  is usually some type of precious metal. 
D)  will generally be accepted in trade for less than its face value. 
A)  is money that would have no value if it were not usable as money. 
B)  is illegal in most advanced, industrial countries. 
C)  is usually some type of precious metal. 
D)  will generally be accepted in trade for less than its face value.

Question 19

The difference between money and income is that whereas income is an individual's

Accepted Answer

A)  flow of earnings over a period of time, money is an individual's stock of currency and currency substitutes. 
B)  stock of all assets, money is an individual's stock of currency and currency substitutes. 
C)  flow of earnings over a period of time, money is an individual's stock of all assets. 
D)  stock of currency and currency substitutes, money is an individual's stock of all assets. 
A)  flow of earnings over a period of time, money is an individual's stock of currency and currency substitutes. 
B)  stock of all assets, money is an individual's stock of currency and currency substitutes. 
C)  flow of earnings over a period of time, money is an individual's stock of all assets. 
D)  stock of currency and currency substitutes, money is an individual's stock of all assets.

Question 20

Suppose the GDP implicit price deflator was 112.7 in 2015 and 116.0 in 2016.Therefore,the inflation rate in 2016 would be

Accepted Answer

A)  2.8%. 
B)  2.9%. 
C)  3.3%. 
D)  16%. 
A)  2.8%. 
B)  2.9%. 
C)  3.3%. 
D)  16%.

Using a good as a medium of exchange confers the benefit that

Which of the following is NOT on the Fed's list of the five most desirable outcomes for a payments system?

Which of the following is an example of fiat money?

All of the following are characteristics of debit cards EXCEPT

Barter is

Why does the payments system continue to change over time?

The narrowest money measure is

A hyperinflation occurs when

Which of the following is the largest measure of money in the United States?

Evidence indicates that there's a strong relationship between money and inflation in

Since the year 2000,total currency in circulation

Under a barter system

Wealth is

If money is declared to be legal tender,it must be

What determines the acceptability of dollar bills as a medium of exchange?

When economists refer to the role of money as a standard of deferred payment,they mean that

According to a Federal Reserve study,electronic payments now make up ________ of all noncash payments.

Fiat money

The difference between money and income is that whereas income is an individual's

Suppose the GDP implicit price deflator was 112.7 in 2015 and 116.0 in 2016.Therefore,the inflation rate in 2016 would be

Introducing Money and the Financial System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

Exam 2: Money and the Payments System

Using a good as a medium of exchange confers the benefit that

Which of the following is NOT on the Fed's list of the five most desirable outcomes for a payments system?

Which of the following is an example of fiat money?

All of the following are characteristics of debit cards EXCEPT

Barter is

Why does the payments system continue to change over time?

The narrowest money measure is

A hyperinflation occurs when

Which of the following is the largest measure of money in the United States?

Evidence indicates that there's a strong relationship between money and inflation in

Since the year 2000,total currency in circulation

Under a barter system

Wealth is

If money is declared to be legal tender,it must be

What determines the acceptability of dollar bills as a medium of exchange?

When economists refer to the role of money as a standard of deferred payment,they mean that

According to a Federal Reserve study,electronic payments now make up ________ of all noncash payments.

Fiat money

The difference between money and income is that whereas income is an individual's

Suppose the GDP implicit price deflator was 112.7 in 2015 and 116.0 in 2016.Therefore,the inflation rate in 2016 would be

Introducing Money and the Financial System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters