Question 1

According to the textbook,many people believe that the character Dorothy,in the book The Wonderful Wizard of Oz,represents

Accepted Answer

A) presidential candidate Barry Goldwater. 
B) President Abraham Lincoln. 
C) President William McKinley. 
D) presidential candidate William Jennings Bryan. 
A) presidential candidate Barry Goldwater. 
B) President Abraham Lincoln. 
C) President William McKinley. 
D) presidential candidate William Jennings Bryan. D

Question 2

According to the textbook,L.Frank Baum,the author of The Wonderful Wizard of Oz,blamed ____________________ for the economic depression of 1893 and the related hardships faced by farmers and workers.

Accepted Answer

A) the gold standard 
B) the silver standard 
C) a massive tornado 
D) high taxes 
A) the gold standard 
B) the silver standard 
C) a massive tornado 
D) high taxes A

Question 3

When money is used to buy a computer,it is 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 C

Question 4

According to the textbook,the good that emerged as money in World War II POW camps was

Accepted Answer

A) tinned beef. 
B) toilet paper. 
C) cigarettes. 
D) cheese. 
A) tinned beef. 
B) toilet paper. 
C) cigarettes. 
D) cheese.

Question 5

Total reserves are

Accepted Answer

A) equal to required reserves plus excess reserves. 
B) equal to vault cash plus bank deposits at the Federal Reserve. 
C) an asset to banks. 
D) both b and c 
E) all of the above 
A) equal to required reserves plus excess reserves. 
B) equal to vault cash plus bank deposits at the Federal Reserve. 
C) an asset to banks. 
D) both b and c 
E) all of the above

Question 6

In the history of banking,warehouse receipts refer to receipts

Accepted Answer

A) that goldsmiths once issued acknowledging that they held a customer's gold. 
B) for storing furniture in a warehouse. 
C) goldsmiths issued to each other when they borrowed gold. 
D) for storing food and other perishables in a warehouse. 
A) that goldsmiths once issued acknowledging that they held a customer's gold. 
B) for storing furniture in a warehouse. 
C) goldsmiths issued to each other when they borrowed gold. 
D) for storing food and other perishables in a warehouse.

Question 7

Which of the following statements is false?

Accepted Answer

A) Money is the only good that can (or does)serve as a store of value. 
B) In a barter economy,there is no good that serves as a unit of account. 
C) There are higher transaction costs of making exchanges in a barter economy than in a money economy. 
D) Money functions as a medium of exchange,unit of account,and store of value. 
A) Money is the only good that can (or does)serve as a store of value. 
B) In a barter economy,there is no good that serves as a unit of account. 
C) There are higher transaction costs of making exchanges in a barter economy than in a money economy. 
D) Money functions as a medium of exchange,unit of account,and store of value.

Question 8

Which of the following statements is true?

Accepted Answer

A) A savings deposit is not counted in the most basic,or narrow,definition of the money supply. 
B) M1 is sometimes referred to as transactions money. 
C) Money reduces the transaction costs of making exchanges. 
D) b and c 
E) a,b,and c 
A) A savings deposit is not counted in the most basic,or narrow,definition of the money supply. 
B) M1 is sometimes referred to as transactions money. 
C) Money reduces the transaction costs of making exchanges. 
D) b and c 
E) a,b,and c

Question 9

Inflation does the greatest harm to money's function as a

Accepted Answer

A) medium of exchange. 
B) unit of account. 
C) store of value. 
D) liquid asset. 
A) medium of exchange. 
B) unit of account. 
C) store of value. 
D) liquid asset.

Question 10

A unit of account is

Accepted Answer

A) a bank account. 
B) a savings account. 
C) a common measurement in which values are expressed. 
D) the same as a medium of exchange. 
E) none of the above 
A) a bank account. 
B) a savings account. 
C) a common measurement in which values are expressed. 
D) the same as a medium of exchange. 
E) none of the above

Question 11

Which of the following illustrates a barter transaction?

Accepted Answer

A) A bushel of oranges is traded for a bushel of apples. 
B) Someone buys a pizza for the special price of $4. 
C) Someone buys a house for $100,000. 
D) b and c 
E) a,b,and c 
A) A bushel of oranges is traded for a bushel of apples. 
B) Someone buys a pizza for the special price of $4. 
C) Someone buys a house for $100,000. 
D) b and c 
E) a,b,and c

Question 12

In a barter economy,

Accepted Answer

A) money trades for goods,goods trade for services,and services trade for money. 
B) goods and services trade for other goods and services. 
C) some goods are more readily accepted in exchange than others. 
D) making exchanges takes less time (on average)than in a money economy. 
E) b and c 
A) money trades for goods,goods trade for services,and services trade for money. 
B) goods and services trade for other goods and services. 
C) some goods are more readily accepted in exchange than others. 
D) making exchanges takes less time (on average)than in a money economy. 
E) b and c

Question 13

If checkable deposits in Bank A total $620 million and the required reserve ratio is 9 percent,then required reserves at Bank A equal

Accepted Answer

A) $564.2 million. 
B) $468 million. 
C) $28.8 million. 
D) $55.8 million. 
E) $558 million. 
A) $564.2 million. 
B) $468 million. 
C) $28.8 million. 
D) $55.8 million. 
E) $558 million.

Question 14

A "money market deposit account" is a(n)

Accepted Answer

A) checking account that pays no interest. 
B) bank account with a specified maturity date. 
C) store of Federal Reserve Notes held in bank vaults to cash checkable deposits on demand. 
D) checking account created from an automatic transfer from a savings account. 
E) interest-earning account at a bank or thrift institution that usually has a minimum balance requirement. 
A) checking account that pays no interest. 
B) bank account with a specified maturity date. 
C) store of Federal Reserve Notes held in bank vaults to cash checkable deposits on demand. 
D) checking account created from an automatic transfer from a savings account. 
E) interest-earning account at a bank or thrift institution that usually has a minimum balance requirement.

Question 15

The Federal Reserve began paying interest on reserves in 2008.

Accepted Answer

A) True 
 B)False

Question 16

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 17

If a bank's deposits at the Federal Reserve equal $40 million and its total reserves equal $35 million,what does the bank's vault cash equal?

Accepted Answer

A) $5 million 
B) $75 million 
C) $37.5 million 
D) $30 million 
A) $5 million 
B) $75 million 
C) $37.5 million 
D) $30 million

Question 18

Credit cards are a widely accepted form of money.

Accepted Answer

A) True 
 B)False

Question 19

Total bank reserves equal

Accepted Answer

A) checkable deposits + vault cash + traveler's checks. 
B) vault cash + currency in the hands of the nonbanking public. 
C) bank deposits at the Federal Reserve. 
D) bank deposits at the Federal Reserve + vault cash. 
A) checkable deposits + vault cash + traveler's checks. 
B) vault cash + currency in the hands of the nonbanking public. 
C) bank deposits at the Federal Reserve. 
D) bank deposits at the Federal Reserve + vault cash.

Question 20

List and describe the three functions of money.

Accepted Answer

Money serves as a medium of exchange,a u

Exam 12: Money,banking,and the Financial System

According to the textbook,many people believe that the character Dorothy,in the book The Wonderful Wizard of Oz,represents

According to the textbook,L.Frank Baum,the author of The Wonderful Wizard of Oz,blamed ____________________ for the economic depression of 1893 and the related hardships faced by farmers and workers.

When money is used to buy a computer,it is functioning as a

According to the textbook,the good that emerged as money in World War II POW camps was

Total reserves are

In the history of banking,warehouse receipts refer to receipts

Which of the following statements is false?

Which of the following statements is true?

Inflation does the greatest harm to money's function as a

A unit of account is

Which of the following illustrates a barter transaction?

In a barter economy,

If checkable deposits in Bank A total $620 million and the required reserve ratio is 9 percent,then required reserves at Bank A equal

A "money market deposit account" is a(n)

The Federal Reserve began paying interest on reserves in 2008.

Which of the following is true?

If a bank's deposits at the Federal Reserve equal $40 million and its total reserves equal $35 million,what does the bank's vault cash equal?

Credit cards are a widely accepted form of money.

Total bank reserves equal

List and describe the three functions of money.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Macroeconomic Measurements, part II: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

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

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

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