Exam 2: Money and the Payments System

Consider two barter economies: Duos and Varietas.Duos produces two different goods, whereas Varietas produces 80 different goods.Both countries have the same number of people.In which barter economy is it more likely that the means of payment and the units of account would be efficient? How many relative prices are there in Duos compared with Varietas? Which economy would benefit more from adopting money?

Sophia receives a $400 gift card for her campus bookstore from her parents.Which of the following is true regarding the $400 gift card?

Gross Domestic Product in the U.S.is roughly:

M1 has decreased in its usefulness in understanding inflation due to:

After the Revolutionary War, the U.S.used gold coins and notes backed by gold.Historically, why did the U.S.adopt the use of gold as a currency? How does this compare with the currency used today?

As a result of "Check 21-The Check Clearing for the 21st Century Act":

The unit of account characteristic of money:

You purchase a good by writing a check for $1,000.Considering the financial payments system this check follows, when is the check money? Explain.

M1 is:

The use of money makes us more efficient because:

The income velocity of money is defined as nominal GDP divided by the money supply.In the winter of 2010 the U.S.nominal GDP was estimated to be around $14.5 trillion annually and M2 was $8463.5 billion.Would the income velocity of M2 be equal to 1; <1; or > 1? Explain.

The most commonly quoted monetary aggregate is:

Most of the non-cash retail payments made each year in the United States are made by:

In comparing money to a U.S.Treasury bond held by an individual, we can say:

While money is an asset not all assets are money because:

What does it mean to say that an asset is "liquid"?

Economists study the link between money and inflation because:

In comparing money to a share of Microsoft stock held by an individual, we can say:

An advantage that money has over other assets is that it:

There are three goods produced in an economy by three individuals: