Question 1

Because money __________________,people are _________________ likely to specialize in their work in a money economy.

Accepted Answer

A)  is a store of value; less 
B)  eliminates the double coincidence of wants; more 
C)  is a unit of account; more 
D)  eliminates the need for holdings of precious metals; more 
A)  is a store of value; less 
B)  eliminates the double coincidence of wants; more 
C)  is a unit of account; more 
D)  eliminates the need for holdings of precious metals; more

Question 2

Banks in the United States operate under a fractional reserve system,which means they must maintain only a fraction of their deposits in the form of

Accepted Answer

A)  debt. 
B)  loans. 
C)  an insurance policy. 
D)  reserves. 
A)  debt. 
B)  loans. 
C)  an insurance policy. 
D)  reserves.

Question 3

The balance in a banking customer's checkable deposit account is the amount the bank owes the customer.

Accepted Answer

A) True 
 B)False

Question 4

If reserves equal $59 million and vault cash equals $29 million,it follows that

Accepted Answer

A)  bank deposits at the Federal Reserve equal $29 million. 
B)  currency in the hands of the public equals $29 million. 
C)  excess reserves equal $30 million. 
D)  bank deposits at the Federal Reserve equal $30 million. 
E)  There is not enough information to answer the question. 
A)  bank deposits at the Federal Reserve equal $29 million. 
B)  currency in the hands of the public equals $29 million. 
C)  excess reserves equal $30 million. 
D)  bank deposits at the Federal Reserve equal $30 million. 
E)  There is not enough information to answer the question.

Question 5

According to the textbook,The Wonderful Wizard of Oz is alleged to be a story about

Accepted Answer

A)  the California gold strikes of 1849. 
B)  the end of the gold standard in 1934. 
C)  the presidential election of 1896. 
D)  the financial panic of 1907. 
A)  the California gold strikes of 1849. 
B)  the end of the gold standard in 1934. 
C)  the presidential election of 1896. 
D)  the financial panic of 1907.

Question 6

Which of the following is not included in M1?

Accepted Answer

A)  retail money market mutual funds 
B)  checkable deposits 
C)  traveler's checks 
D)  all of the above 
A)  retail money market mutual funds 
B)  checkable deposits 
C)  traveler's checks 
D)  all of the above

Question 7

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-Refer to Exhibit 12-1.How much bank capital does Bank ABC have (i.e.what dollar value goes in blank (A))?

Accepted Answer

A)  $0. 
B)  $50 
C)  $20 
D)  $10 
E)  $5 
A)  $0. 
B)  $50 
C)  $20 
D)  $10 
E)  $5

Question 8

If checkable deposits in Bank A total $390 million and the required reserve ratio is 10 percent,then required reserves at Bank A equal

Accepted Answer

A)  $3.9 million. 
B)  $0.39 million. 
C)  $93 million. 
D)  $39 million. 
E)  There is not enough information provided to answer the question. 
A)  $3.9 million. 
B)  $0.39 million. 
C)  $93 million. 
D)  $39 million. 
E)  There is not enough information provided to answer the question.

Question 9

Which of the following is true?

Accepted Answer

A)  Reserves = required reserves - excess reserves. 
B)  Reserves - required reserves = excess reserves. 
C)  Reserves = required reserves + excess reserves. 
D)  b and c 
E)  a and b 
A)  Reserves = required reserves - excess reserves. 
B)  Reserves - required reserves = excess reserves. 
C)  Reserves = required reserves + excess reserves. 
D)  b and c 
E)  a and b

Question 10

Required reserves are a set percentage of total reserves that must be held in cash in a bank's vault or in the bank's reserve account at the Fed.

Accepted Answer

A) True 
 B)False

Question 11

To an economist,money is a synonym for which of the following?

Accepted Answer

A)  income 
B)  credit 
C)  wealth 
D)  salary 
E)  none of the above 
A)  income 
B)  credit 
C)  wealth 
D)  salary 
E)  none of the above

Question 12

In a barter economy,

Accepted Answer

A)  money is a medium of exchange. 
B)  coins are used to facilitate trade. 
C)  money is a store of value. 
D)  goods and services are traded directly for each other. 
E)  the money supply consists entirely of coins and currency. 
A)  money is a medium of exchange. 
B)  coins are used to facilitate trade. 
C)  money is a store of value. 
D)  goods and services are traded directly for each other. 
E)  the money supply consists entirely of coins and currency.

Question 13

Saying that it takes twice as many dollars to buy one ticket for a concert than two tickets for a movie refers to the use of money as a

Accepted Answer

A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  means of achieving the double coincidence of wants. 
A)  medium of exchange. 
B)  unit of account. 
C)  store of value. 
D)  means of achieving the double coincidence of wants.

Question 14

Money is defined by economists as

Accepted Answer

A)  the market value of an asset. 
B)  the funds one receives during a specified period of time. 
C)  any good that is widely accepted in exchange and for the repayment of debts. 
D)  both b and c 
E)  all of the above 
A)  the market value of an asset. 
B)  the funds one receives during a specified period of time. 
C)  any good that is widely accepted in exchange and for the repayment of debts. 
D)  both b and c 
E)  all of the above

Question 15

"Barter" implies that

Accepted Answer

A)  to get one good or service,an individual offers another. 
B)  to get one good or service,an individual offers money. 
C)  to get a check,an individual offers a good or service. 
D)  different kinds of money are exchanged for each other. 
E)  none of the above 
A)  to get one good or service,an individual offers another. 
B)  to get one good or service,an individual offers money. 
C)  to get a check,an individual offers a good or service. 
D)  different kinds of money are exchanged for each other. 
E)  none of the above

Question 16

Your neighbor has knowledge of economics and you would like her to share it with you.You own a car,a CD player and a new pair of running shoes.You wish to make a trade,but the neighbor does not want what you have.The problem can be stated as follows: You are not satisfying the

Accepted Answer

A)  rule of transaction costs. 
B)  double coincidence of wants. 
C)  law of marketability. 
D)  terms of a common denominator. 
A)  rule of transaction costs. 
B)  double coincidence of wants. 
C)  law of marketability. 
D)  terms of a common denominator.

Question 17

Exchanges take less time in a barter economy than in a money economy because a double coincidence of wants is necessary for a money economy.

Accepted Answer

A) True 
 B)False

Question 18

A house is $100,000,a computer is $2,000,and a car is $20,000.In this context,money is principally functioning as a

Accepted Answer

A)  unit of account. 
B)  store of value. 
C)  medium of exchange. 
D)  none of the above 
A)  unit of account. 
B)  store of value. 
C)  medium of exchange. 
D)  none of the above

Question 19

Bank A has checkable deposits of $10 million and total reserves of $1 million.The required reserve ratio is 9 percent.The bank has excess reserves of

Accepted Answer

A)  $910,000. 
B)  $91,000. 
C)  $100,000. 
D)  $10,000. 
E)  There is not enough information provided to answer this question. 
A)  $910,000. 
B)  $91,000. 
C)  $100,000. 
D)  $10,000. 
E)  There is not enough information provided to answer this question.

Question 20

Bank ABC has checkable deposits of $415 million and total reserves of $50 million.The required reserve ratio is 9 percent.The bank has excess reserves of

Accepted Answer

A)  $365,000,000. 
B)  $45,500,000. 
C)  $12,650,000. 
D)  $14,550,000. 
E)  There is not enough information provided to answer this question. 
A)  $365,000,000. 
B)  $45,500,000. 
C)  $12,650,000. 
D)  $14,550,000. 
E)  There is not enough information provided to answer this question.

Exam 12: Government and Product Markets: Antitrust and Regulation

Because money __________________,people are _________________ likely to specialize in their work in a money economy.

Banks in the United States operate under a fractional reserve system,which means they must maintain only a fraction of their deposits in the form of

The balance in a banking customer's checkable deposit account is the amount the bank owes the customer.

If reserves equal $59 million and vault cash equals $29 million,it follows that

According to the textbook,The Wonderful Wizard of Oz is alleged to be a story about

Which of the following is not included in M1?

​ ​ -Refer to Exhibit 12-1.How much bank capital does Bank ABC have (i.e.what dollar value goes in blank (A))?

If checkable deposits in Bank A total $390 million and the required reserve ratio is 10 percent,then required reserves at Bank A equal

Which of the following is true?

Required reserves are a set percentage of total reserves that must be held in cash in a bank's vault or in the bank's reserve account at the Fed.

To an economist,money is a synonym for which of the following?

In a barter economy,

Saying that it takes twice as many dollars to buy one ticket for a concert than two tickets for a movie refers to the use of money as a

Money is defined by economists as

"Barter" implies that

Your neighbor has knowledge of economics and you would like her to share it with you.You own a car,a CD player and a new pair of running shoes.You wish to make a trade,but the neighbor does not want what you have.The problem can be stated as follows: You are not satisfying the

Exchanges take less time in a barter economy than in a money economy because a double coincidence of wants is necessary for a money economy.

A house is $100,000,a computer is $2,000,and a car is $20,000.In this context,money is principally functioning as a

Bank A has checkable deposits of $10 million and total reserves of $1 million.The required reserve ratio is 9 percent.The bank has excess reserves of

Bank ABC has checkable deposits of $415 million and total reserves of $50 million.The required reserve ratio is 9 percent.The bank has excess reserves of

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

Because money __,people are _ likely to specialize in their work in a money economy.

-Refer to Exhibit 12-1.How much bank capital does Bank ABC have (i.e.what dollar value goes in blank (A))?