Question 1

The problem with barter economies is that they require:

Accepted Answer

A) less time and trouble to trade as compared with a money economy. 
B) that there be a double coincidence of wants. 
C) a banking system for trade to occur. 
D) that there be a single coincidence of wants.

Question 2

A person's 'wealth' is the same as her or his income.

Accepted Answer

A) True 
 B)False

Question 3

What is the main monetary policy tool used by the Reserve Bank of Australia (RBA)and why?
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Accepted Answer

The answer of What is the main monetary policy tool...

Question 4

A major source of inefficiency in barter economies is that they require:

Accepted Answer

A) a standard of deferred payment to make trade possible. 
B) a double coincidence of wants in exchange. 
C) more liquid stores of value than do monetary economies. 
D) All of these options are correct.

Question 5

M1 includes:

Accepted Answer

A) currency plus demand deposits in banks. 
B) currency plus demand deposits in Australian-owned banks only. 
C) currency plus all banks and non-bank financial institution deposits. 
D) currency plus all deposits in Australian- and foreign-owned banks.

Question 6

What is 'hyperinflation' and what causes it?
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Accepted Answer

The answer of What is 'hyperinflation' and what causes it?
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_____________________________________________________________________________________________...

Question 7

Robba Bank has $500 million in deposits, is meeting its usual reserve ratio, and has no excess liquidity. It has $125 million in liquid assets. Robba Bank therefore has a reserve ratio of:

Accepted Answer

A) 4%. 
B) 1.25%. 
C) 25%. 
D) 20%.

Question 8

If households in the economy decide to take money out of demand deposit accounts and put this money into long-term savings accounts, this will:

Accepted Answer

A) decrease M1 and increase M3. 
B) decrease M1 and increase broad money. 
C) decrease M1 and not change M3. 
D) increase M1 and decrease M3.

Question 9

During World War II, prisoners of war used ________ as money.

Accepted Answer

A) bullets 
B) cowrie shells 
C) chocolate 
D) cigarettes

Question 10

Which of the following criteria would make gold a poor medium of exchange?

Accepted Answer

A) Its value depends on its purity and its purity is not easy to visibly identify. 
B) Durability so that value is not lost by spoilage. 
C) Value relative to its weight so that amounts large enough to be useful in trade can be easily transported. 
D) Divisibility because different goods are valued differently.

Question 11

For most banks, their largest asset is their:

Accepted Answer

A) reserves. 
B) securities. 
C) deposits. 
D) loans.

Question 12

List the five criteria necessary in order for a good to be suitable as a medium of exchange, and explain whether Australian currency is suitable to use as a medium of exchange.
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Accepted Answer

The answer of List the five criteria necessary in order...

Question 13

Explain whether credit cards are considered to be 'money'.
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Accepted Answer

The answer of Explain whether credit cards are considered to...

Question 14

'Liquidity' is defined as the ease with which a given asset can be converted to a:

Accepted Answer

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

Question 15

Credit cards are considered:

Accepted Answer

A) part of M1. 
B) part of M3. 
C) broad money. 
D) not part of the money supply.

Question 16

The 'quantity theory of money' argues that an increase in the money supply at a rate that is faster than the rate of increase in real GDP will lead to an increase in the price level in the long run.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not a major function of the Reserve Bank of Australia?

Accepted Answer

A) maintaining the integrity of the financial system 
B) monitoring credit growth 
C) determining taxation rates 
D) controlling the cash rate

Question 18

The ________ the amount of excess reserves a bank holds, the ________ the size of the deposit multiplier.

Accepted Answer

A) greater; larger 
B) greater; smaller 
C) smaller; smaller 
D) smaller; greater likelihood there is no change in

Question 19

As credit is now the main measure of monetary movements used by the Reserve Bank of Australia, credit is now defined as 'money'.

Accepted Answer

A) True 
 B)False

Question 20

A person's 'wealth':

Accepted Answer

A) is a measure of how much money the person has. 
B) equals the value of the person's assets minus his or her liabilities. 
C) is measured independently of his or her current and expected future income. 
D) All of these options are correct.

Exam 11: Money, Banks and the Reserve Bank of Australia

The problem with barter economies is that they require:

A person's 'wealth' is the same as her or his income.

What is the main monetary policy tool used by the Reserve Bank of Australia (RBA)and why? _ _

A major source of inefficiency in barter economies is that they require:

M1 includes:

What is 'hyperinflation' and what causes it? _ _

Robba Bank has $500 million in deposits, is meeting its usual reserve ratio, and has no excess liquidity. It has $125 million in liquid assets. Robba Bank therefore has a reserve ratio of:

If households in the economy decide to take money out of demand deposit accounts and put this money into long-term savings accounts, this will:

During World War II, prisoners of war used ________ as money.

Which of the following criteria would make gold a poor medium of exchange?

For most banks, their largest asset is their:

List the five criteria necessary in order for a good to be suitable as a medium of exchange, and explain whether Australian currency is suitable to use as a medium of exchange. _ _

Explain whether credit cards are considered to be 'money'. _ _

'Liquidity' is defined as the ease with which a given asset can be converted to a:

Credit cards are considered:

The 'quantity theory of money' argues that an increase in the money supply at a rate that is faster than the rate of increase in real GDP will lead to an increase in the price level in the long run.

Which of the following is not a major function of the Reserve Bank of Australia?

The the amount of excess reserves a bank holds, the the size of the deposit multiplier.

As credit is now the main measure of monetary movements used by the Reserve Bank of Australia, credit is now defined as 'money'.

A person's 'wealth':

Exam 11: Money, Banks and the Reserve Bank of Australia

The problem with barter economies is that they require:

A person's 'wealth' is the same as her or his income.

What is the main monetary policy tool used by the Reserve Bank of Australia (RBA)and why? _____________________________________________________________________________________________ _____________________________________________________________________________________________

A major source of inefficiency in barter economies is that they require:

M1 includes:

What is 'hyperinflation' and what causes it? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Robba Bank has $500 million in deposits, is meeting its usual reserve ratio, and has no excess liquidity. It has $125 million in liquid assets. Robba Bank therefore has a reserve ratio of:

If households in the economy decide to take money out of demand deposit accounts and put this money into long-term savings accounts, this will:

During World War II, prisoners of war used ________ as money.

Which of the following criteria would make gold a poor medium of exchange?

For most banks, their largest asset is their:

Explain whether credit cards are considered to be 'money'. _____________________________________________________________________________________________ _____________________________________________________________________________________________

'Liquidity' is defined as the ease with which a given asset can be converted to a:

Credit cards are considered:

The 'quantity theory of money' argues that an increase in the money supply at a rate that is faster than the rate of increase in real GDP will lead to an increase in the price level in the long run.

Which of the following is not a major function of the Reserve Bank of Australia?

The ________ the amount of excess reserves a bank holds, the ________ the size of the deposit multiplier.

As credit is now the main measure of monetary movements used by the Reserve Bank of Australia, credit is now defined as 'money'.

A person's 'wealth':

What is the main monetary policy tool used by the Reserve Bank of Australia (RBA)and why? _ _

What is 'hyperinflation' and what causes it? _ _

Explain whether credit cards are considered to be 'money'. _ _

The the amount of excess reserves a bank holds, the the size of the deposit multiplier.