Question 1

The ________ of holding money is measured by the interest yield that could have been earned by holding some other asset.

Accepted Answer

A) inflationary properties 
B) necessity 
C) opportunity cost 
D) the liquidity 
A) inflationary properties 
B) necessity 
C) opportunity cost 
D) the liquidity C

Question 2

The money supply is

Accepted Answer

A) the rate at which the Bank of Canada prints currency. 
B) limited to currency and coins. 
C) the amount of money in circulation. 
D) the rate at which the Bank of Canada creates money. 
A) the rate at which the Bank of Canada prints currency. 
B) limited to currency and coins. 
C) the amount of money in circulation. 
D) the rate at which the Bank of Canada creates money. C

Question 3

An individual wanting the most liquid asset possible will hold

Accepted Answer

A) currency. 
B) a savings account. 
C) demand deposits at a bank. 
D) Canadian government bonds. 
A) currency. 
B) a savings account. 
C) demand deposits at a bank. 
D) Canadian government bonds. A

Question 4

If you have $50 in cash,a balance of $635 in your chequing account at the Royal Bank,and a jar with $15.75 in coins,how much M1+ do you have?

Accepted Answer

You have $700.75 of M1+,compri

Question 5

Which of the following is an example of M2+ money?

Accepted Answer

A) a credit card 
B) savings deposits 
C) coins 
D) chequing accounts 
A) a credit card 
B) savings deposits 
C) coins 
D) chequing accounts

Question 6

If you save $2,500 for a down payment on a new car,you are using money as

Accepted Answer

A) a store of value. 
B) a unit of account. 
C) a medium of exchange. 
D) a standard of deferred payment. 
A) a store of value. 
B) a unit of account. 
C) a medium of exchange. 
D) a standard of deferred payment.

Question 7

Money is still useful during times of inflation because

Accepted Answer

A) it still retains the characteristic of predictability of value. 
B) more money can be made so people can still purchase the goods and services they want. 
C) it is not a liquid asset. 
D) its opportunity cost falls as inflation rises. 
A) it still retains the characteristic of predictability of value. 
B) more money can be made so people can still purchase the goods and services they want. 
C) it is not a liquid asset. 
D) its opportunity cost falls as inflation rises.

Question 8

The M2+ definition of the money supply includes

Accepted Answer

A) savings deposits and non-personal notice deposits. 
B) M1+ plus coins. 
C) M1 plus personal savings and non-personal notice deposits. 
D) savings deposits. 
A) savings deposits and non-personal notice deposits. 
B) M1+ plus coins. 
C) M1 plus personal savings and non-personal notice deposits. 
D) savings deposits.

Question 9

Which of the following is an example of M2++ money?

Accepted Answer

A) a credit card 
B) savings deposit at a foreign bank 
C) Canada Savings Bonds 
D) demand deposits 
A) a credit card 
B) savings deposit at a foreign bank 
C) Canada Savings Bonds 
D) demand deposits

Question 10

Liquidity refers to

Accepted Answer

A) the ease with which an asset can be acquired or disposed of without incurring high transaction costs. 
B) the expected return from an asset. 
C) the amount of indebtedness held against an asset. 
D) the net worth of the individual in question. 
A) the ease with which an asset can be acquired or disposed of without incurring high transaction costs. 
B) the expected return from an asset. 
C) the amount of indebtedness held against an asset. 
D) the net worth of the individual in question.

Question 11

The ________ of money varies inversely with the price level.

Accepted Answer

A) law 
B) purchasing power 
C) standard of deferred payment 
D) medium of exchange 
A) law 
B) purchasing power 
C) standard of deferred payment 
D) medium of exchange

Question 12

The best measure of money is

Accepted Answer

A) coins and currency. 
B) the one based on the transactions approach. 
C) the one based on the liquidity approach. 
D) something economists have never agreed on. 
A) coins and currency. 
B) the one based on the transactions approach. 
C) the one based on the liquidity approach. 
D) something economists have never agreed on.

Question 13

Describe the issue of asymmetric information and relate it to insurance companies and financial institutions.

Accepted Answer

Asymmetric information is about informat

Question 14

In a barter system,we would expect to see

Accepted Answer

A) many different units of money. 
B) money and goods exchanged for each other. 
C) wide-spread financial institutions. 
D) goods traded directly for other goods and services. 
A) many different units of money. 
B) money and goods exchanged for each other. 
C) wide-spread financial institutions. 
D) goods traded directly for other goods and services.

Question 15

The ________ to measuring money stresses the role of money as a store of value.

Accepted Answer

A) medium of exchange 
B) unit of accounting 
C) liquidity approach 
D) standard of deferred payment 
A) medium of exchange 
B) unit of accounting 
C) liquidity approach 
D) standard of deferred payment

Question 16

What is included in M1+ money supply?

Accepted Answer

The narrowest designation of t

Question 17

A decrease in the interest rate would induce people to

Accepted Answer

A) sell shares of stock and buy bonds,but would have no effect on their desire to hold money. 
B) get rid of all their money and buy stocks with it. 
C) sell their least liquid assets and hold more money in case interest rates go up again. 
D) hold a larger fraction of their wealth in the form of money. 
A) sell shares of stock and buy bonds,but would have no effect on their desire to hold money. 
B) get rid of all their money and buy stocks with it. 
C) sell their least liquid assets and hold more money in case interest rates go up again. 
D) hold a larger fraction of their wealth in the form of money.

Question 18

When a person deposits a check into her checking Registered Retirement Savings Plan (RRSP),

Accepted Answer

A) she owes the bank money. 
B) the bank owes her money. 
C) no one owes anybody anything.The deposit is an asset to both the bank and the person. 
D) no one owes anybody anything.The deposit is an asset to the person,but is neither an asset nor a liability to the bank. 
A) she owes the bank money. 
B) the bank owes her money. 
C) no one owes anybody anything.The deposit is an asset to both the bank and the person. 
D) no one owes anybody anything.The deposit is an asset to the person,but is neither an asset nor a liability to the bank.

Question 19

As a result of money in an economy

Accepted Answer

A) people are greedier than in a barter economy. 
B) stealing exists and people have to find ways to prevent theft. 
C) transaction costs are higher than would be the case in a barter economy. 
D) output and economic growth are greater than they would be in a barter economy. 
A) people are greedier than in a barter economy. 
B) stealing exists and people have to find ways to prevent theft. 
C) transaction costs are higher than would be the case in a barter economy. 
D) output and economic growth are greater than they would be in a barter economy.

Question 20

Which of the following is TRUE of M2+?

Accepted Answer

A) It is larger than M1+. 
B) It excludes savings deposits. 
C) It does not include the most highly liquid components of the money supply. 
D) It is less than M1+. 
A) It is larger than M1+. 
B) It excludes savings deposits. 
C) It does not include the most highly liquid components of the money supply. 
D) It is less than M1+.

The ________ of holding money is measured by the interest yield that could have been earned by holding some other asset.

The money supply is

An individual wanting the most liquid asset possible will hold

If you have $50 in cash,a balance of $635 in your chequing account at the Royal Bank,and a jar with $15.75 in coins,how much M1+ do you have?

Which of the following is an example of M2+ money?

If you save $2,500 for a down payment on a new car,you are using money as

Money is still useful during times of inflation because

The M2+ definition of the money supply includes

Which of the following is an example of M2++ money?

Liquidity refers to

The ________ of money varies inversely with the price level.

The best measure of money is

Describe the issue of asymmetric information and relate it to insurance companies and financial institutions.

In a barter system,we would expect to see

The ________ to measuring money stresses the role of money as a store of value.

What is included in M1+ money supply?

A decrease in the interest rate would induce people to

When a person deposits a check into her checking Registered Retirement Savings Plan (RRSP),

As a result of money in an economy

Which of the following is TRUE of M2+?

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 12: Money and the Banking System

The ________ of holding money is measured by the interest yield that could have been earned by holding some other asset.

The money supply is

An individual wanting the most liquid asset possible will hold

If you have $50 in cash,a balance of $635 in your chequing account at the Royal Bank,and a jar with $15.75 in coins,how much M1+ do you have?

Which of the following is an example of M2+ money?

If you save $2,500 for a down payment on a new car,you are using money as

Money is still useful during times of inflation because

The M2+ definition of the money supply includes

Which of the following is an example of M2++ money?

Liquidity refers to

The ________ of money varies inversely with the price level.

The best measure of money is

Describe the issue of asymmetric information and relate it to insurance companies and financial institutions.

In a barter system,we would expect to see

The ________ to measuring money stresses the role of money as a store of value.

What is included in M1+ money supply?

A decrease in the interest rate would induce people to

When a person deposits a check into her checking Registered Retirement Savings Plan (RRSP),

As a result of money in an economy

Which of the following is TRUE of M2+?

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters