Question 1

Which of the following statements are correct?

Accepted Answer

A) debit cards provide for the immediate direct transfer of deposit accounts 
B) debit cards may be used for cash advances,even when there is not sufficient money in the account 
C) debit cards may not be used to make cash withdrawals from automatic teller machines 
D) all the above 
E) none of the above 
A) debit cards provide for the immediate direct transfer of deposit accounts 
B) debit cards may be used for cash advances,even when there is not sufficient money in the account 
C) debit cards may not be used to make cash withdrawals from automatic teller machines 
D) all the above 
E) none of the above

Question 2

Which of the following statements about L is not true?

Accepted Answer

A) L is the broadest measure of money available to the public 
B) L includes commercial paper 
C) L includes mortgages 
D) All of the above statements are correct. 
A) L is the broadest measure of money available to the public 
B) L includes commercial paper 
C) L includes mortgages 
D) All of the above statements are correct.

Question 3

The price level of goods and services may be expressed as the ratio of _____________.

Accepted Answer

A) GDP to real output 
B) real output to GDP 
C) Velocity to GDP 
D) real output to velocity 
A) GDP to real output 
B) real output to GDP 
C) Velocity to GDP 
D) real output to velocity

Question 4

____________ is money,debt instruments,equity securities,and other financial contracts that are backed by real assets and the earning abilities of issuers.

Accepted Answer

A) financial assets 
B) real assets 
C) government investments 
D) all of the above 
E) none of the above 
A) financial assets 
B) real assets 
C) government investments 
D) all of the above 
E) none of the above

Question 5

A ____________ is a short-term debt instrument issued by commercial banks in denominations of $100,000 or more with typical maturities ranging from one month to one year that have an active secondary market that allows short-term investors to easily match their cash or liquidity needs when they arise.

Accepted Answer

A) negotiable certificate of deposit (NC
D)  
B) A repurchase agreement 
C) government bond 
D) money market security 
E) none of the above 
A) negotiable certificate of deposit (NC
D)  
B) A repurchase agreement 
C) government bond 
D) money market security 
E) none of the above

Question 6

All of the following are normally categorized as financial institutions EXCEPT:

Accepted Answer

A) S&Ls 
B) brokerage firms 
C) commercial banks 
D) credit unions 
A) S&Ls 
B) brokerage firms 
C) commercial banks 
D) credit unions

Question 7

Inflation leads to an increase in the purchasing power of money.

Accepted Answer

A) True 
 B)False

Question 8

Legal tender proclaimed to be money by law is called:

Accepted Answer

A) representative money 
B) fiat money 
C) representative full-bodied money 
D) none of the above 
A) representative money 
B) fiat money 
C) representative full-bodied money 
D) none of the above

Question 9

Historically speaking,___________ taken as a group has/have generally been a surplus economic unit in the past:

Accepted Answer

A) individuals 
B) business 
C) government 
D) a and c 
E) none of the above 
A) individuals 
B) business 
C) government 
D) a and c 
E) none of the above

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Fiat money is legal tender proclaimed to be money by law.

Accepted Answer

A) True 
 B)False

Question 12

Representative full-bodied money is paper money that is backed by an amount of precious metal equal in value to the face amount of the paper money.

Accepted Answer

A) True 
 B)False

Question 13

_____________ is a promise of future payment issued by a firm and guaranteed by a bank that is used to finance international trade with typical maturities ranging from one to six months.

Accepted Answer

A) A negotiable certificate of deposit (NC
D)  
B) A repurchase agreement 
C) Commercial paper 
D) A banker's acceptance 
E) none of the above 
A) A negotiable certificate of deposit (NC
D)  
B) A repurchase agreement 
C) Commercial paper 
D) A banker's acceptance 
E) none of the above

Question 14

Credit money includes:

Accepted Answer

A) checking accounts at commercial banks 
B) checkable deposits at savings and loan associations 
C) checking accounts at credit unions 
D) all the above 
E) none of the above 
A) checking accounts at commercial banks 
B) checkable deposits at savings and loan associations 
C) checking accounts at credit unions 
D) all the above 
E) none of the above

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The savings-investment process

Accepted Answer

A) involves the transfer of business funds to individuals for investing in stocks and bonds 
B) involves the transfer of business funds to individuals for investing in homes 
C) involves the transfer in individual savings to the Federal Government. 
D) involves the transfer in individual savings to business firms in exchange for their securities. 
A) involves the transfer of business funds to individuals for investing in stocks and bonds 
B) involves the transfer of business funds to individuals for investing in homes 
C) involves the transfer in individual savings to the Federal Government. 
D) involves the transfer in individual savings to business firms in exchange for their securities.

Question 17

The narrowest definition of money supply is:

Accepted Answer

A) M1 
B) M2 
C) M3 
D) M5 
A) M1 
B) M2 
C) M3 
D) M5

Question 18

_____________ believe that when the money supply exceeds the amount of money demanded,the public will spend more rapidly,causing real economic activity or prices to rise.They also believe that a too-rapid rate of growth in the money supply will ultimately result in rising prices or inflation because excess money will be used to bid up the prices of existing goods.

Accepted Answer

A) Monetarists 
B) Keynesians 
C) Neo Classicalists 
D) none of the above 
A) Monetarists 
B) Keynesians 
C) Neo Classicalists 
D) none of the above

Question 19

When it is a means of paying for goods and services and discharging debts,money is referred to as a:

Accepted Answer

A) store of purchasing power 
B) medium of exchange 
C) standard of value 
D) liquid asset 
A) store of purchasing power 
B) medium of exchange 
C) standard of value 
D) liquid asset

Question 20

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

Accepted Answer

A) deflation 
B) inflation 
C) stagflation 
D) none of the above 
A) deflation 
B) inflation 
C) stagflation 
D) none of the above

Which of the following statements are correct?

Which of the following statements about L is not true?

The price level of goods and services may be expressed as the ratio of _____________.

____________ is money,debt instruments,equity securities,and other financial contracts that are backed by real assets and the earning abilities of issuers.

All of the following are normally categorized as financial institutions EXCEPT:

Inflation leads to an increase in the purchasing power of money.

Legal tender proclaimed to be money by law is called:

Historically speaking,___________ taken as a group has/have generally been a surplus economic unit in the past:

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

Fiat money is legal tender proclaimed to be money by law.

Representative full-bodied money is paper money that is backed by an amount of precious metal equal in value to the face amount of the paper money.

_____________ is a promise of future payment issued by a firm and guaranteed by a bank that is used to finance international trade with typical maturities ranging from one to six months.

Credit money includes:

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

The savings-investment process

The narrowest definition of money supply is:

When it is a means of paying for goods and services and discharging debts,money is referred to as a:

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

The Financial Environment

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 2: Money and the Monetary System

Which of the following statements are correct?

Which of the following statements about L is not true?

The price level of goods and services may be expressed as the ratio of _____________.

____________ is money,debt instruments,equity securities,and other financial contracts that are backed by real assets and the earning abilities of issuers.

All of the following are normally categorized as financial institutions EXCEPT:

Inflation leads to an increase in the purchasing power of money.

Legal tender proclaimed to be money by law is called:

Historically speaking,___________ taken as a group has/have generally been a surplus economic unit in the past:

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

Fiat money is legal tender proclaimed to be money by law.

Representative full-bodied money is paper money that is backed by an amount of precious metal equal in value to the face amount of the paper money.

_____________ is a promise of future payment issued by a firm and guaranteed by a bank that is used to finance international trade with typical maturities ranging from one to six months.

Credit money includes:

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

The savings-investment process

The narrowest definition of money supply is:

When it is a means of paying for goods and services and discharging debts,money is referred to as a:

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

The Financial Environment

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters