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Money And Banking [ch. 3]

35 Questions  I  By Emy_2
Money and Banking [Ch. 3]
What is Money?

  
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1.  Money is anything that is generally accepted in payment for goods and services or in the repayment of debt
A.
B.
2.  Income is the same thing as money, because if someone has a high income that person earns a lot of money
A.
B.
3.  Of the three functions of money, the function that separates money from all other assets is that money serves as a medium of exchange
A.
B.
4.  Barter is inefficient because it requires that there be a "double coincidence of wants" in order for an exchange to take place
A.
B.
5.  Barer is inefficient because barter requires an enormous number of prices for each good to be valued in terms of all other goods
A.
B.
6.  Money is the most liquid store of value in the economy
A.
B.
7.  Money is an excellent store of value during infationary times
A.
B.
8.  Fiat money evolved into commodity money because commodity money is less likely to be stolen and is easier to transport
A.
B.
9.  Fiat money is paper money that the government has guarenteed to redeem in terms of a particular precious metal. 
A.
B.
10.  The driving force behind the movement from checks toward electronic payment is the time and high cost of transporting and processing checks
A.
B.
11.  Savings deposits are included in the monetary aggregate  known as M1
A.
B.
12.  M1 contains only perfectly liquid financial assets
A.
B.
13.  Policy makers can use either M1 or M2 as a guide for monetary policy and get the same results because the movements of these monetary aggregates always closely track each other
A.
B.
14.  The Fed rarely revises its first estimates of the monetary aggregates because its first estimates usually turn out to be very accurate
A.
B.
15.  The Fed should not concern itself too much with short-run movements in the money supply because there are significant revisions in the monetary aggregates due to small depository institutions reporting their deposits infrequently and revisions in seasonal variation as new data comes in.
A.
B.
16.  Which of the following is measured as a flow per unit of time?
A.
B.
C.
D.
17.  Which of the following economies has the least efficient payments system?
A.
B.
C.
D.
18.  In which of the following economies are good and services traded directly for other goods and services
A.
B.
C.
D.
19.  Which of the following is not a purpose or function of money?
A.
B.
C.
D.
20.  A payments system based on money is
A.
B.
C.
D.
E.
21.  With a payments system based on money, John can specialize as a medical doctor and use the money earned from his efforts to buy all of the things he needs.  Which of the functions of money has been most clearly demonstrated by the scenario above?
A.
B.
C.
D.
22.  Which of the following is not a characteristic of an effective commodity money?
A.
B.
C.
D.
E.
23.  An asset with great liquidity is one that
A.
B.
C.
D.
E.
24.  Which of the following is an example of a commodity money?
A.
B.
C.
D.
E.
25.  Which of the following is an example of fiat money?
A.
B.
C.
D.
E.
26.  Which of the following forms of payment is least efficient because it generates the highest transactions costs?
A.
B.
C.
D.
27.  Which of the following is not an example of electronic money?
A.
B.
C.
D.
28.  Which of the following statements about fiat money is false?
A.
B.
C.
D.
29.  When prices are rising rapidly, money does not act as a good
A.
B.
C.
D.
30.  Which of the following is not included in the M1 monetary aggregate?
A.
B.
C.
D.
E.
31.  Checkable deposits are included in which of the following monetary aggregates?
A.
B.
C.
D.
32.  Which of the following is not included in M2?
A.
B.
C.
D.
33.  Which of the following statements about the monetary aggregates is true?
A.
B.
C.
D.
34.  Which of the following statements about the liquidity of the assets in the monetary aggregates is true?
A.
B.
C.
D.
35.  Which of the following is not a characteristic of barter economies?
A.
B.
C.
D.
E.
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