Question 1

When a person deposits a check into her checking account,

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 2

Without an accepted medium of exchange,people

Accepted Answer

A) have to specialize in one area of production. 
B) have to rely on gold or silver in order to exchange goods and services. 
C) have to resort to barter in order to exchange goods and services. 
D) can efficiently obtain goods and services. 
A) have to specialize in one area of production. 
B) have to rely on gold or silver in order to exchange goods and services. 
C) have to resort to barter in order to exchange goods and services. 
D) can efficiently obtain goods and services.

Question 3

Are credit cards considered money?

Accepted Answer

No.A credit card is not a unit of accoun

Question 4

Which function of money allows people to specialize in areas in which they have a comparative advantage?

Accepted Answer

A) Medium of exchange 
B) Unit of accounting 
C) Store of value 
D) Standard of deferred payment 
A) Medium of exchange 
B) Unit of accounting 
C) Store of value 
D) Standard of deferred payment

Question 5

An increase 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 smaller 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 smaller fraction of their wealth in the form of money.

Question 6

What are the functions of money?

Accepted Answer

Money serves as a medium of exchange,whi

Question 7

Transactions accounts in commercial banks and other financial institutions are classified as money because

Accepted Answer

A) they are not liabilities of the banks. 
B) they sometimes earn an interest income for the depositor. 
C) they are generally acceptable in the payment of debt. 
D) banks hold currency in their vaults equal to the value of demand deposits. 
A) they are not liabilities of the banks. 
B) they sometimes earn an interest income for the depositor. 
C) they are generally acceptable in the payment of debt. 
D) banks hold currency in their vaults equal to the value of demand deposits.

Question 8

The reason we are willing to accept money with no intrinsic value is that

Accepted Answer

A) paper currency may be exchanged for full-bodied money. 
B) the money supply is backed by an equal amount of gold and silver. 
C) we have a fiduciary monetary system in which currency has both acceptability and predictability of value. 
D) the value of the money varies directly with changes in the price level. 
A) paper currency may be exchanged for full-bodied money. 
B) the money supply is backed by an equal amount of gold and silver. 
C) we have a fiduciary monetary system in which currency has both acceptability and predictability of value. 
D) the value of the money varies directly with changes in the price level.

Question 9

Anything people generally accept in exchange for goods and services is defined as

Accepted Answer

A) a person's net worth. 
B) money 
C) a byproduct of a barter economy. 
D) barter. 
A) a person's net worth. 
B) money 
C) a byproduct of a barter economy. 
D) barter.

Question 10

Financial intermediaries are institutions that

Accepted Answer

A) set interest rates. 
B) produce money for the federal government. 
C) transfer funds from savers to investors. 
D) have chequable deposit accounts. 
A) set interest rates. 
B) produce money for the federal government. 
C) transfer funds from savers to investors. 
D) have chequable deposit accounts.

Question 11

What is liquidity? Why is money the most liquid of all assets? What is the cost of this liquidity?

Accepted Answer

Liquidity is the degree to which an asse

Question 12

Savings deposits are included in

Accepted Answer

A) M1+ only. 
B) M2+ only. 
C) M1 and M2. 
D) savings balances only. 
A) M1+ only. 
B) M2+ only. 
C) M1 and M2. 
D) savings balances only.

Question 13

Money in a fiduciary monetary system is backed by

Accepted Answer

A) gold. 
B) the public's confidence that the assets will continue to serve as money. 
C) the intrinsic value of the materials used to make the assets that serve as money. 
D) assets owned by the government that are intrinsically valuable. 
A) gold. 
B) the public's confidence that the assets will continue to serve as money. 
C) the intrinsic value of the materials used to make the assets that serve as money. 
D) assets owned by the government that are intrinsically valuable.

Question 14

Why do people often buy gold in times of war?

Accepted Answer

A) They want the unit-of-account function of money and government currencies lack this function in times of war. 
B) They want a store of value as well as a medium of exchange since it is uncertain what will happen to the value of local currencies or whether they will be accepted. 
C) They think that gold will be a good investment in the future. 
D) They want something that can be carried easily in case of flight. 
A) They want the unit-of-account function of money and government currencies lack this function in times of war. 
B) They want a store of value as well as a medium of exchange since it is uncertain what will happen to the value of local currencies or whether they will be accepted. 
C) They think that gold will be a good investment in the future. 
D) They want something that can be carried easily in case of flight.

Question 15

Even when people know the purchasing power of the currency is declining they continue to use the currency because

Accepted Answer

A) they have no other choice. 
B) its value is holding better than any other asset. 
C) its value is still predictable. 
D) it still has some intrinsic value. 
A) they have no other choice. 
B) its value is holding better than any other asset. 
C) its value is still predictable. 
D) it still has some intrinsic value.

Question 16

An increase in the interest rate would induce people to

Accepted Answer

A) buy 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 smaller fraction of their wealth in the form of money. 
A) buy 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 smaller fraction of their wealth in the form of money.

Question 17

________ account balances in chartered banks are counted in M1+.

Accepted Answer

A) Chequable deposit 
B) Saving deposit 
C) American dollar 
D) Stock market 
A) Chequable deposit 
B) Saving deposit 
C) American dollar 
D) Stock market

Question 18

M2 plus deposits held at near banks such as trust companies and credit unions are referred to as .

Accepted Answer

A) savings deposits and non-personal notice deposits. 
B) M1 plus M2.. 
C) M1+. 
D) M2+. 
A) savings deposits and non-personal notice deposits. 
B) M1 plus M2.. 
C) M1+. 
D) M2+.

Question 19

Assets that can be easily converted into money without loss of value are

Accepted Answer

A) transactions balances. 
B) liquid. 
C) currencies. 
D) liabilities. 
A) transactions balances. 
B) liquid. 
C) currencies. 
D) liabilities.

Question 20

When we examine the Canadian money supply,the largest component of M1+ is

Accepted Answer

A) coins minted by the treasury. 
B) chequable deposits. 
C) certificates of deposit. 
D) Bank of Canada notes. 
A) coins minted by the treasury. 
B) chequable deposits. 
C) certificates of deposit. 
D) Bank of Canada notes.

When a person deposits a check into her checking account,

Without an accepted medium of exchange,people

Are credit cards considered money?

Which function of money allows people to specialize in areas in which they have a comparative advantage?

An increase in the interest rate would induce people to

What are the functions of money?

Transactions accounts in commercial banks and other financial institutions are classified as money because

The reason we are willing to accept money with no intrinsic value is that

Anything people generally accept in exchange for goods and services is defined as

Financial intermediaries are institutions that

What is liquidity? Why is money the most liquid of all assets? What is the cost of this liquidity?

Savings deposits are included in

Money in a fiduciary monetary system is backed by

Why do people often buy gold in times of war?

Even when people know the purchasing power of the currency is declining they continue to use the currency because

An increase in the interest rate would induce people to

________ account balances in chartered banks are counted in M1+.

M2 plus deposits held at near banks such as trust companies and credit unions are referred to as .

Assets that can be easily converted into money without loss of value are

When we examine the Canadian money supply,the largest component of M1+ is

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

When a person deposits a check into her checking account,

Without an accepted medium of exchange,people

Are credit cards considered money?

Which function of money allows people to specialize in areas in which they have a comparative advantage?

An increase in the interest rate would induce people to

What are the functions of money?

Transactions accounts in commercial banks and other financial institutions are classified as money because

The reason we are willing to accept money with no intrinsic value is that

Anything people generally accept in exchange for goods and services is defined as

Financial intermediaries are institutions that

What is liquidity? Why is money the most liquid of all assets? What is the cost of this liquidity?

Savings deposits are included in

Money in a fiduciary monetary system is backed by

Why do people often buy gold in times of war?

Even when people know the purchasing power of the currency is declining they continue to use the currency because

An increase in the interest rate would induce people to

________ account balances in chartered banks are counted in M1+.

M2 plus deposits held at near banks such as trust companies and credit unions are referred to as .

Assets that can be easily converted into money without loss of value are

When we examine the Canadian money supply,the largest component of M1+ is

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