Question 1

A bimetallic standard is a monetary standard based on two metals, usually silver and gold.

Accepted Answer

A) True 
 B)False  True

Question 2

M3 includes all of the following EXCEPT:

Accepted Answer

A) checking and savings 
B) MMMFs 
C) stocks and bonds 
D) all of the above are included 
A) checking and savings 
B) MMMFs 
C) stocks and bonds 
D) all of the above are included C

Question 3

An international gold standard dominated international trade during:

Accepted Answer

A) World War II 
B) 1880-1914 
C) 1944-1971 
D) 1914-1932 
A) World War II 
B) 1880-1914 
C) 1944-1971 
D) 1914-1932 B

Question 4

Fiat money must be backed by a specific amount of gold or silver.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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

Accepted Answer

A) True 
 B)False

Question 7

A major factor in the severity of the 2007-09 financial crisis was the massive amounts of debt taken on by:

Accepted Answer

A) 	individuals 
B) 	business 
C) 	government 
D) 	all of the above 
E) 	none of the above 
A) 	individuals 
B) 	business 
C) 	government 
D) 	all of the above 
E) 	none of the above

Question 8

Money market funds are not included in which of the following definitions of the money supply?

Accepted Answer

A) M1 
B) M2 
C) M3 
D) M4 or L 
A) M1 
B) M2 
C) M3 
D) M4 or L

Question 9

The narrowest definition of money supply is:

Accepted Answer

A) 	M1 
B) 	M2 
C) 	M3 
D) 	M4 
A) 	M1 
B) 	M2 
C) 	M3 
D) 	M4

Question 10

The use of "continentals" led to a long period of distrust of paper money.

Accepted Answer

A) True 
 B)False

Question 11

Primitive economies have little occasion to exchange goods or services.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is false?

Accepted Answer

A) Until the Civil War, the federal government was the major issuer of paper money. 
B) In order for traders in early economies to accept or barter for items, the supply of the item had to be limited in relation to the desire of individual in the economy to have the item. 
C) Collectors of old coins and paper money are referred to as numismatists. 
D) All of the above statements are false. 
A) Until the Civil War, the federal government was the major issuer of paper money. 
B) In order for traders in early economies to accept or barter for items, the supply of the item had to be limited in relation to the desire of individual in the economy to have the item. 
C) Collectors of old coins and paper money are referred to as numismatists. 
D) All of the above statements are false.

Question 13

The public's holdings of U.S.savings bonds are included in which of the following money supply definitions?

Accepted Answer

A) M1 
B) M2 
C) M3 
D) M4 or L 
A) M1 
B) M2 
C) M3 
D) M4 or L

Question 14

Which of the following is not a component of the M1 definition of the money supply?

Accepted Answer

A) travelers' checks 
B) savings and small time deposits at depository institutions 
C) currency held by the non-bank public 
D) demand deposits at depository institutions 
A) travelers' checks 
B) savings and small time deposits at depository institutions 
C) currency held by the non-bank public 
D) demand deposits at depository institutions

Question 15

"Continentals" were backed by:

Accepted Answer

A) gold 
B) silver 
C) possible future tax revenues 
D) none of the above 
A) gold 
B) silver 
C) possible future tax revenues 
D) none of the above

Question 16

A central bank defines and regulates the amount of the money supply in the financial system.

Accepted Answer

A) True 
 B)False

Question 17

_____________ 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 18

Inflation is:

Accepted Answer

A) an increase in the purchasing power of money 
B) a decrease in the quality of goods and services 
C) an increase in the prices of goods and services not offset by increases in the quality of those goods and services 
D) a measure of the money supply 
A) an increase in the purchasing power of money 
B) a decrease in the quality of goods and services 
C) an increase in the prices of goods and services not offset by increases in the quality of those goods and services 
D) a measure of the money supply

Question 19

Deposit money is backed by:

Accepted Answer

A) gold 
B) silver 
C) creditworthiness of the issuer 
D) creditworthiness of the depository institution 
E) none of the above 
A) gold 
B) silver 
C) creditworthiness of the issuer 
D) creditworthiness of the depository institution 
E) none of the above

Question 20

_____________ 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) A negotiable certificate of deposit (NC
D)  
B) A repurchase agreement 
C) Commercial paper 
D) Government bond 
E) all of the above 
A) A negotiable certificate of deposit (NC
D)  
B) A repurchase agreement 
C) Commercial paper 
D) Government bond 
E) all of the above

A bimetallic standard is a monetary standard based on two metals, usually silver and gold.

M3 includes all of the following EXCEPT:

An international gold standard dominated international trade during:

Fiat money must be backed by a specific amount of gold or silver.

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

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

A major factor in the severity of the 2007-09 financial crisis was the massive amounts of debt taken on by:

Money market funds are not included in which of the following definitions of the money supply?

The narrowest definition of money supply is:

The use of "continentals" led to a long period of distrust of paper money.

Primitive economies have little occasion to exchange goods or services.

Which of the following statements is false?

The public's holdings of U.S.savings bonds are included in which of the following money supply definitions?

Which of the following is not a component of the M1 definition of the money supply?

"Continentals" were backed by:

A central bank defines and regulates the amount of the money supply in the financial system.

_____________ 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.

Inflation is:

Deposit money is backed by:

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

A bimetallic standard is a monetary standard based on two metals, usually silver and gold.

M3 includes all of the following EXCEPT:

An international gold standard dominated international trade during:

Fiat money must be backed by a specific amount of gold or silver.

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

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

A major factor in the severity of the 2007-09 financial crisis was the massive amounts of debt taken on by:

Money market funds are not included in which of the following definitions of the money supply?

The narrowest definition of money supply is:

The use of "continentals" led to a long period of distrust of paper money.

Primitive economies have little occasion to exchange goods or services.

Which of the following statements is false?

The public's holdings of U.S.savings bonds are included in which of the following money supply definitions?

Which of the following is not a component of the M1 definition of the money supply?

"Continentals" were backed by:

A central bank defines and regulates the amount of the money supply in the financial system.

_____________ 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.

Inflation is:

Deposit money is backed by:

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