Econ Test 3-12

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1.   Which of the following illustrates a barter transaction?
A.
B.
C.
D.
E.
2.     22.   A savings deposit is a type of
A.
B.
C.
D.
E.
3.  To an economist, money is a synonym for which of the following?
A.
B.
C.
D.
E.
4.     33.   Total bank reserves equal
A.
B.
C.
D.
5.     30.   According to the text, in the book version of The Wonderful Wizard of Oz, Dorothy's slippers are
A.
B.
C.
D.
6.     16.   The requirement of a "double coincidence of wants" is the chief __________ of the __________ exchange system.
A.
B.
C.
D.
7.     14.   Money evolved out of the self-interested actions of
A.
B.
C.
D.
8.     56.   Money is defined by economists as
A.
B.
C.
D.
E.
9.     46.   A bank has $10,000 in excess reserves and the required reserve ratio is 20 percent. This means the bank could have __________ in checkable deposit liabilities and __________ in reserves.
A.
B.
C.
D.
10.     29.   Accordidng to the text, The Wonderful Wizard of Oz is alleged to be a story about
A.
B.
C.
D.
11.     13.   In the Yap civilization of the South Pacific prior to 1920, large, heavy stones in the shape of a wheel were used as money. Which function of money was probably least served by this form of money?
A.
B.
C.
D.
12.  Which of the following is a correct listing of money's functions?
A.
B.
C.
D.
E.
13.     25.   According to the text, L. Frank Baum, the author of The Wonderful Wizard of Oz, blamed ____________________ for the economic depression of 1893 and the related hardships faced by farmers and workers.
A.
B.
C.
D.
14.  Barter is
A.
B.
C.
D.
15.     79.   Banks in the United States operate under a fractional reserve system, which means they must maintain only a fraction of their deposits in the form of
A.
B.
C.
D.
16.     27.   The first bankers were
A.
B.
C.
D.
E.
17.     76.   Consider the following data: currency (held outside banks) = $354 billion, checkable deposits = $250 billion, traveler's checks = $4 billion, small-denomination time deposits = $200 billion, savings deposits = $100 billion, retail money market mutual funds = $160 billion. M1 equals __________ billion and M2 equals __________ billion.
A.
B.
C.
D.
E.
18.     45.   When a bank makes a loan to one of its customers, to the bank the loan is classified as
A.
B.
C.
D.
19.     42.   Bank A has deposits of $200,000 and reserves of $24,000. If the required reserve ratio is 11 percent, the bank has excess reserves of
A.
B.
C.
D.
20.     20.   Which of the following statements is true?
A.
B.
C.
D.
E.
21.     12.   According to the text, the good that emerged as money in World War II POW camps was
A.
B.
C.
D.
22.     96.   If excess reserves are $10 million, (total) reserves are $14 million, and the required reserve ratio is 10%, then required reserves equal ________________ and checkable deposits equal ____________________.
A.
B.
C.
D.
23.     52.   M2 includes M1 plus all of the following except
A.
B.
C.
D.
24.     19.   Historically, which of the following goods have evolved into money?
A.
B.
C.
D.
E.
25.  Transaction costs are best defined as the
A.
B.
C.
D.
26.     21.   A "money market deposit account" is a(n)
A.
B.
C.
D.
E.
27.     35.   If checkable deposits in Bank A total $100 million and the required reserve ratio is 9 percent, then required reserves at Bank A equal
A.
B.
C.
D.
28.  Money's basic advantage as compared to barter is that
A.
B.
C.
D.
29.     10.   If a person uses money to buy a pair of shoes, money is functioning as
A.
B.
C.
D.
30.     34.   Required reserves are the amount of
A.
B.
C.
D.
31.     18.   M1 is comprised of currency held outside banks + traveler’s checks + __________.
A.
B.
C.
D.
E.
32.     43.   A bank has $10 million in checkable deposits and $2.5 million in reserves. If the required reserve ratio is 10 percent, then the bank has
A.
B.
C.
D.
E.
33.     50.   The unit of account function of money refers to the
A.
B.
C.
D.
34.     26.   A savings account functions as
A.
B.
C.
D.
35.     28.   Because money __________________, people are _________________ likely to specialize their work in a money economy.
A.
B.
C.
D.
36.  If peanuts were widely accepted for purposes of exchange, then
A.
B.
C.
D.
E.
37.     37.   Ninth National Bank holds $150,000,000 in checkable deposits and $12,000,000 in total reserves. With a required reserve ratio of 8 percent, how much in excess reserves is Ninth National holding?
A.
B.
C.
D.
E.
38.     78.   Bank deposits at the Federal Reserve = $40 billion, vault cash = $2 billion, required reserve ratio = 0.10, and total checkable deposits = $400 billion. It follows that required reserves equal __________ billion, (total) reserves equal __________ billion and excess reserves equal __________ billion.
A.
B.
C.
D.
E.
39.     59.   The M2 money supply
A.
B.
C.
D.
E.
40.  A unit of account is
A.
B.
C.
D.
E.
41.     93.   A bank has $50,000 in excess reserves and the required reserve ratio is 10 percent. This means the bank could have __________ in checkable deposit liabilities and __________ in (total) reserves.
A.
B.
C.
D.
42.     99.   The potential buyer of a house has less information about the house than the seller of the house. This is a case of
A.
B.
C.
D.
E.
43.     95.   If reserves equal $59 million and vault cash equals $29 million, it follows that
A.
B.
C.
D.
E.
44.     38.   Tenth National Bank holds $235,000,000 in checkable deposits and $25,500,000 in reserves. With a required reserve ratio of 10 percent, how much in excess reserves is Tenth National holding?
A.
B.
C.
D.
45.     17.   Your neighbor has knowledge of economics and you would like her to share it with you. You own a car, a CD player and a new pair of running shoes. You wish to make a trade, but the neighbor does not want what you have. The problem can be stated as follows: You are not satisfying the
A.
B.
C.
D.
46.     44.   Bank A holds $1 million in required reserves and the required reserve ratio is 9 percent. It follows that Bank A holds checkable deposit liabilities that total approximately
A.
B.
C.
D.
47.     39.   The amount of required reserves a bank holds depends on the
A.
B.
C.
D.
48.     31.   In the history of banking, warehouse receipts refer to receipts
A.
B.
C.
D.
49.     51.   The store of value function of money refers to the ability of money to
A.
B.
C.
D.
50.     24.   M2 is comprised of
A.
B.
C.
D.
51.     47.   Which of the following is true?
A.
B.
C.
D.
E.
52.  In which situation are transaction costs most likely to be the lowest?
A.
B.
C.
D.
53.     15.   Compared to barter, money __________ transaction costs, making transactions __________ time-consuming.
A.
B.
C.
D.
54.     40.   Reserves held beyond the required amount are called __________ reserves.
A.
B.
C.
D.
55.     32.   Fractional reserve banking is a term used to describe a banking system whereby
A.
B.
C.
D.
E.
56.     23.   In a barter economy, people are _________ to specialize in the production of one good or service, compared to in a money economy.
A.
B.
C.
D.
57.     41.   Bank A has deposits of $8,000 and total reserves of $2,000. If the required reserve ratio is 0.15, the bank has required reserves of
A.
B.
C.
D.
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