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Ch 13 Money And Banking

10 Questions
Ch 13 Money And Banking

Ch 13 of McConnell and Brue.

Questions and Answers
  • 1. 
    When the price of a product is stated in terms of dollars and cents, then money is functioning as a unit of account.
    • A. 

      True

    • B. 

      False

  • 2. 
    The money supply designated M1 is the sum of currency and noncheckable deposits.
    • A. 

      True

    • B. 

      False

  • 3. 
    The currency component of M1 includes both coins and paper money.
    • A. 

      True

    • B. 

      False

  • 4. 
    If a coin is token money, its face value is less than its intrinsic value.
    • A. 

      True

    • B. 

      False

  • 5. 
    Both commercial banks and thrift institutions accept checkable deposits.
    • A. 

      True

    • B. 

      False

  • 6. 
    The checkable deposit of the Federal government at the Federal Reserve Banks are a component of M1.
    • A. 

      True

    • B. 

      False

  • 7. 
    M2 exceeds M1 by the amount of noncheckable savings, small time deposits, and money market deposit accounts and money market mutual funds.
    • A. 

      True

    • B. 

      False

  • 8. 
    A small time deposit is one that is less than $100,000.
    • A. 

      True

    • B. 

      False

  • 9. 
    M2 is less than M3 by the amount of small time deposits in depository institutions.
    • A. 

      True

    • B. 

      False

  • 10. 
    Economists and public officials are in general agreement on how to define the money supply in the U.S.
    • A. 

      True

    • B. 

      False