Question 1

What do many economists blame for the severity of the Great Depression?

Accepted Answer

A)  The collapse of the banking system. 
B)  A rapid increase in the money supply. 
C)  The issuing of an excessively large amount of currency by the Federal Reserve. 
D)  The collapse of the electronic funds transfer system. 
A)  The collapse of the banking system. 
B)  A rapid increase in the money supply. 
C)  The issuing of an excessively large amount of currency by the Federal Reserve. 
D)  The collapse of the electronic funds transfer system.

Question 2

According to the quantity theory of money,the growth rate of which of the following is zero?

Accepted Answer

A)  money supply 
B)  velocity 
C)  real GDP 
D)  price level 
A)  money supply 
B)  velocity 
C)  real GDP 
D)  price level

Question 3

All of the following are problems associated with commodity money EXCEPT

Accepted Answer

A)  it is a cumbersome form of payments system. 
B)  commodities tend to have little value in and of themselves. 
C)  its value is dependent on its purity. 
D)  costs are incurred in certifying the purity and weight of commodity money. 
A)  it is a cumbersome form of payments system. 
B)  commodities tend to have little value in and of themselves. 
C)  its value is dependent on its purity. 
D)  costs are incurred in certifying the purity and weight of commodity money.

Question 4

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 5

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 6

Which of the following is NOT an important criterion for whether a good will be usable as a medium of exchange?

Accepted Answer

A)  The good must be of standardized quality. 
B)  The good must be valuable relative to its weight. 
C)  The good must have value even if it were not being used as money. 
D)  The good must be durable so that value is not lost through product spoilage. 
A)  The good must be of standardized quality. 
B)  The good must be valuable relative to its weight. 
C)  The good must have value even if it were not being used as money. 
D)  The good must be durable so that value is not lost through product spoilage.

Question 7

In a barter system individuals

Accepted Answer

A)  find it impossible to specialize. 
B)  must be entirely self-sufficient. 
C)  find it difficult to specialize, but may be able to do so. 
D)  will almost invariably specialize. 
A)  find it impossible to specialize. 
B)  must be entirely self-sufficient. 
C)  find it difficult to specialize, but may be able to do so. 
D)  will almost invariably specialize.

Question 8

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 9

Andy can't make a deal with Danny.Andy has a Alex Rodriguez baseball card and would like to trade it to Danny for Danny's Albert Pujols card,but Danny doesn't want a Alex Rodriquez card.Andy's problem illustrates the drawback to a barter system known as

Accepted Answer

A)  the specialization problem. 
B)  the double coincidence of wants problem. 
C)  the many prices problem. 
D)  the transactions problem. 
A)  the specialization problem. 
B)  the double coincidence of wants problem. 
C)  the many prices problem. 
D)  the transactions problem.

Question 10

Which country experiencing hyperinflation in excess of 15 billion percent in 2008?

Accepted Answer

A)  Argentina 
B)  Canada 
C)  Iceland 
D)  Zimbabwe 
A)  Argentina 
B)  Canada 
C)  Iceland 
D)  Zimbabwe

Question 11

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 12

In what sense do self-fulfilling expectations determine the acceptability of a medium of exchange?

Accepted Answer

A)  People like to do what the government expects them to do. 
B)  People value something as money only if they believe others will accept it from them as payment. 
C)  People expect that money will never lose its value. 
D)  People expect that eventually every country will use the same medium of exchange. 
A)  People like to do what the government expects them to do. 
B)  People value something as money only if they believe others will accept it from them as payment. 
C)  People expect that money will never lose its value. 
D)  People expect that eventually every country will use the same medium of exchange.

Question 13

Why would people outside the United States choose to hold U.S.dollars?

Accepted Answer

At times,many countries experience high

Question 14

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.

What do many economists blame for the severity of the Great Depression?

According to the quantity theory of money,the growth rate of which of the following is zero?

All of the following are problems associated with commodity money EXCEPT

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

Under a barter system

Which of the following is NOT an important criterion for whether a good will be usable as a medium of exchange?

In a barter system individuals

The narrowest money measure is

Andy can't make a deal with Danny.Andy has a Alex Rodriguez baseball card and would like to trade it to Danny for Danny's Albert Pujols card,but Danny doesn't want a Alex Rodriquez card.Andy's problem illustrates the drawback to a barter system known as

Which country experiencing hyperinflation in excess of 15 billion percent in 2008?

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

In what sense do self-fulfilling expectations determine the acceptability of a medium of exchange?

Why would people outside the United States choose to hold U.S.dollars?

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

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

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

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

What do many economists blame for the severity of the Great Depression?

According to the quantity theory of money,the growth rate of which of the following is zero?

All of the following are problems associated with commodity money EXCEPT

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

Under a barter system

Which of the following is NOT an important criterion for whether a good will be usable as a medium of exchange?

In a barter system individuals

The narrowest money measure is

Andy can't make a deal with Danny.Andy has a Alex Rodriguez baseball card and would like to trade it to Danny for Danny's Albert Pujols card,but Danny doesn't want a Alex Rodriquez card.Andy's problem illustrates the drawback to a barter system known as

Which country experiencing hyperinflation in excess of 15 billion percent in 2008?

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

In what sense do self-fulfilling expectations determine the acceptability of a medium of exchange?

Why would people outside the United States choose to hold U.S.dollars?

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

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

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

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