Question 1

Which of the following is an example of M1+ 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 2

Goods traded directly for other goods and services refers to

Accepted Answer

A) commodity money. 
B) fiat money 
C) wide-spread trade. 
D) a barter system. 
A) commodity money. 
B) fiat money 
C) wide-spread trade. 
D) a barter system.

Question 3

When an asset is described as being highly liquid,which one of the following characteristics does it possess?

Accepted Answer

A) It earns a high rate of interest,so its purchasing power is maintained when prices rise. 
B) It is easily and readily converted into money without any loss in purchasing power. 
C) The face value of the asset is somewhat less than its value when converted into currency. 
D) The asset holds its value over time. 
A) It earns a high rate of interest,so its purchasing power is maintained when prices rise. 
B) It is easily and readily converted into money without any loss in purchasing power. 
C) The face value of the asset is somewhat less than its value when converted into currency. 
D) The asset holds its value over time.

Question 4

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+.

Question 5

Money serves as a ________,which is another way of saying that money functions as a standard of value.

Accepted Answer

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

Question 6

For something to serve as ________,it must be generally accepted by buyers and sellers.

Accepted Answer

A) banking authority 
B) money 
C) light,durable,and common 
D) gold 
A) banking authority 
B) money 
C) light,durable,and common 
D) gold

Question 7

In Canada,paper currency is properly referred to as

Accepted Answer

A) gold-standard currency. 
B) bank notes. 
C) depository tender. 
D) near-money. 
A) gold-standard currency. 
B) bank notes. 
C) depository tender. 
D) near-money.

Question 8

The process by which financial institutions accept deposits and then lend those deposits is

Accepted Answer

A) financial intermediation. 
B) racketeering. 
C) fiduciary clearing. 
D) a double coincidence. 
A) financial intermediation. 
B) racketeering. 
C) fiduciary clearing. 
D) a double coincidence.

Question 9

The cost of holding money is best described as

Accepted Answer

A) the cost of printing money. 
B) the cost which price decreases impose on money holders. 
C) the yield which is paid to money holders by the Canadian government. 
D) the yield that could have been earned if the asset was held in another form. 
A) the cost of printing money. 
B) the cost which price decreases impose on money holders. 
C) the yield which is paid to money holders by the Canadian government. 
D) the yield that could have been earned if the asset was held in another form.

Question 10

Money is defined as

Accepted Answer

A) a person's net worth. 
B) anything people generally accept in exchange for goods and services. 
C) a byproduct of a barter economy. 
D) any financial instrument that is backed by gold. 
A) a person's net worth. 
B) anything people generally accept in exchange for goods and services. 
C) a byproduct of a barter economy. 
D) any financial instrument that is backed by gold.

Question 11

Non-personal notice deposits are

Accepted Answer

A) chequing accounts. 
B) Eurodollar deposits. 
C) funds deposited by firms. 
D) corporate bonds. 
A) chequing accounts. 
B) Eurodollar deposits. 
C) funds deposited by firms. 
D) corporate bonds.

Question 12

When you buy a hamburger for lunch,you are using money as a

Accepted Answer

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

Question 13

In Canada,bank notes are properly referred to as

Accepted Answer

A) gold-standard currency. 
B) paper currency. 
C) depository tender. 
D) near-money. 
A) gold-standard currency. 
B) paper currency. 
C) depository tender. 
D) near-money.

Question 14

If lenders refuse to state the debt in terms of dollars,then dollars are not a

Accepted Answer

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

Question 15

A fiduciary monetary standard exists when the value of a currency

Accepted Answer

A) is determined by law. 
B) is convertible to a fixed quantity of gold. 
C) depends upon the public's confidence that the currency can be exchanged for goods and services. 
D) increases with inflation. 
A) is determined by law. 
B) is convertible to a fixed quantity of gold. 
C) depends upon the public's confidence that the currency can be exchanged for goods and services. 
D) increases with inflation.

Question 16

As a unit of account,money is used

Accepted Answer

A) to define prices of all other goods. 
B) to pay off future debts. 
C) to hold purchasing power over time. 
D) to exchange for goods and services. 
A) to define prices of all other goods. 
B) to pay off future debts. 
C) to hold purchasing power over time. 
D) to exchange for goods and services.

Question 17

When a person deposits a check into her savings 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 18

Suppose a new customer opens a checking account and a savings account in a commercial bank,placing $100,000 in each.Later,the bank loans the customer $100,000.For this bank,

Accepted Answer

A) assets increased by $200,000 and liabilities increased by $100,000. 
B) assets increased by $100,000 because the loan is an asset and liabilities increased by $100,000 because the checking deposit is a liability.The savings deposit is neither an asset nor a liability. 
C) liabilities increased by $200,000 since the checking account and the savings account are liabilities while it generated no new assets. 
D) assets increased by $100,000 because the loan is an asset and liabilities increased by $200,000 because both the checking deposit and the savings deposit are liabilities to the bank. 
A) assets increased by $200,000 and liabilities increased by $100,000. 
B) assets increased by $100,000 because the loan is an asset and liabilities increased by $100,000 because the checking deposit is a liability.The savings deposit is neither an asset nor a liability. 
C) liabilities increased by $200,000 since the checking account and the savings account are liabilities while it generated no new assets. 
D) assets increased by $100,000 because the loan is an asset and liabilities increased by $200,000 because both the checking deposit and the savings deposit are liabilities to the bank.

Question 19

Credit cards

Accepted Answer

A) are not a part of the money supply because they are not a deferred standard of payment,store of value,or unit of account. 
B) are a part of M1 but not of M2. 
C) are a part of the money supply because they are used to purchase goods and services. 
D) are a part of M2 but not a part of M1. 
A) are not a part of the money supply because they are not a deferred standard of payment,store of value,or unit of account. 
B) are a part of M1 but not of M2. 
C) are a part of the money supply because they are used to purchase goods and services. 
D) are a part of M2 but not a part of M1.

Question 20

Describe the various definitions of money in detail.With this in mind,comment of the possibility of moving to a system with only digital money.

Accepted Answer

A complete description of M1+,M2+,and M2

Which of the following is an example of M1+ money?

Goods traded directly for other goods and services refers to

When an asset is described as being highly liquid,which one of the following characteristics does it possess?

Which of the following is TRUE of M2+?

Money serves as a ________,which is another way of saying that money functions as a standard of value.

For something to serve as ________,it must be generally accepted by buyers and sellers.

In Canada,paper currency is properly referred to as

The process by which financial institutions accept deposits and then lend those deposits is

The cost of holding money is best described as

Money is defined as

Non-personal notice deposits are

When you buy a hamburger for lunch,you are using money as a

In Canada,bank notes are properly referred to as

If lenders refuse to state the debt in terms of dollars,then dollars are not a

A fiduciary monetary standard exists when the value of a currency

As a unit of account,money is used

When a person deposits a check into her savings account,

Suppose a new customer opens a checking account and a savings account in a commercial bank,placing $100,000 in each.Later,the bank loans the customer $100,000.For this bank,

Credit cards

Describe the various definitions of money in detail.With this in mind,comment of the possibility of moving to a system with only digital money.

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

Which of the following is an example of M1+ money?

Goods traded directly for other goods and services refers to

When an asset is described as being highly liquid,which one of the following characteristics does it possess?

Which of the following is TRUE of M2+?

Money serves as a ________,which is another way of saying that money functions as a standard of value.

For something to serve as ________,it must be generally accepted by buyers and sellers.

In Canada,paper currency is properly referred to as

The process by which financial institutions accept deposits and then lend those deposits is

The cost of holding money is best described as

Money is defined as

Non-personal notice deposits are

When you buy a hamburger for lunch,you are using money as a

In Canada,bank notes are properly referred to as

If lenders refuse to state the debt in terms of dollars,then dollars are not a

A fiduciary monetary standard exists when the value of a currency

As a unit of account,money is used

When a person deposits a check into her savings account,

Suppose a new customer opens a checking account and a savings account in a commercial bank,placing $100,000 in each.Later,the bank loans the customer $100,000.For this bank,

Credit cards

Describe the various definitions of money in detail.With this in mind,comment of the possibility of moving to a system with only digital money.

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