Question 1

The most responsive to interest rate changes is the _______ demand for money.

Accepted Answer

A)  transactions
B)  precautionary
C)  speculativeD) All of the above
E) A) and C)

Question 2

Suppose that an economy has 10 basic goods and services.If it were a barter economy it would need

Accepted Answer

A)  more than four times as many prices as money economy.
B)  more than twice as many prices as a money economy.
C)  as many prices as a money economy.
D)  half as many prices as a money economy.
E)  less than a quarter as many prices as money economy.F) None of the above
G) C) and E)

Question 3

Statement I: Branch banking is prohibited in most states.
Statement II: All banks are chartered in the states in which they have their headquarters.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) A) and C)
F) A) and B)

Question 4

If M3 is 4,000,small denomination time deposits are 1,000,and large denomination time deposits are 500,how much is M2?

Accepted Answer

M2 = 4,000...

Question 5

Which is NOT considered money?

Accepted Answer

A)  Checking account balances
B)  Debit cards
C)  Currency and coin
D)  Traveler's checks issued by non-banksE) None of the above
F) A) and B)

Question 6

Which of the following factors contributed to failure of Savings and Loan associations in the 1980s?

Accepted Answer

A)  The high levels of net worth by all savings and loans
B)  Declining real estate values
C)  Avoidance of risky loans by the savings and loans industry
D)  Low interest rates paid to attract depositsE) A) and B)
F) A) and C)

Question 7

If a goldsmith has 200 gold coins in his safe and there are 400 receipts in circulation,how much is his reserve ratio?

Accepted Answer

The answer of If a goldsmith has 200 gold coins...

Question 8

When the receipts given by goldsmiths to depositors were used to make purchases,

Accepted Answer

A)  the gold standard was created.
B)  existing banking laws were violated.
C)  the receipts became in effect paper money.
D)  a fractional reserve banking system was createD.E) A) and B)
F) B) and D)

Question 9

Statement I: The largest American bank is the Bankers Trust.
Statement II: No bank in the U.S.has assets of over $200 billion.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) None of the above
F) A) and D)

Question 10

Large denomination time deposits are included in

Accepted Answer

A)  M2 only.
B)  M3 only.
C)  M2 and M3.
D)  M1 and M2.
E)  M1,M2,and M3.F) B) and E)
G) A) and E)

Question 11

Statement I: A credit card is now considered money.
Statement II: Although gold is not part of our official money supply,it does all the jobs that money does.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) B) and C)
F) A) and B)

Question 12

The opportunity cost of holding money varies with the _________.

Accepted Answer

The answer of The opportunity cost of holding money varies...

Question 13

The opportunity cost of holding cash in your wallet

Accepted Answer

A)  tends to increase as interest rates decrease.
B)  is the foregone interest that could have been earned on other assets.
C)  is zero.
D)  None of the choices are correct.E) All of the above
F) A) and B)

Question 14

People tend to hold more money as

Accepted Answer

A)  the average price level falls.
B)  the interest rate falls.
C)  credit availability rises.
D)  incomes fall.E) All of the above
F) B) and D)

Question 15

Money is NOT

Accepted Answer

A)  a medium of exchange.
B)  a standard of value.
C)  a store of value.
D)  the exclusive means of holding wealth.E) All of the above
F) None of the above

Question 16

Statement I: Over 99% of all banks are members of the FDIC.
Statement II: The savings and loan debacle had its origins in the late 1980s.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) C) and D)
F) B) and D)

Question 17

The quantity of money held by typical individuals falls when there are increases in

Accepted Answer

A)  income.
B)  wealth.
C)  the cost of living.
D)  the degree of uncertainty felt about future income.
E)  rates of interest from bonds.F) A) and E)
G) D) and E)

Question 18

Our money supply has _____ basic jobs to perform.

Accepted Answer

A)  one
B)  two
C)  three
D)  four
E)  fiveF) A) and C)
G) A) and B)

Question 19

Statement I: Large denomination CDs are not part of M2,but are part of M3.
Statement II: Small denomination CDs are part of M2,but not of M3.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.E) A) and D)
F) B) and D)

Question 20

Which statement is true?

Accepted Answer

A)  Our money supply is fixed by law and can be raised by only a very small percentage each year.
B)  Our money supply is backed by gold.
C)  Credit cards are a form of money.
D)  Money makes an excellent store of value during times of inflation.
E)  One of the basic jobs of money is a standard of value.F) B) and C)
G) A) and C)

Exam 13: Money and Banking

The quantity of money held by typical individuals falls when there are increases in

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If a goldsmith has 200 gold coins in his safe and there are 400 receipts in circulation,how much is his reserve ratio?

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When the receipts given by goldsmiths to depositors were used to make purchases,

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Our money supply has _____ basic jobs to perform.

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The opportunity cost of holding cash in your wallet

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Large denomination time deposits are included in

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Which statement is true?

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Statement I: A credit card is now considered money. Statement II: Although gold is not part of our official money supply,it does all the jobs that money does.

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Which of the following factors contributed to failure of Savings and Loan associations in the 1980s?

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If M3 is 4,000,small denomination time deposits are 1,000,and large denomination time deposits are 500,how much is M2?

Correct AnswerverifiedM2 = 4,000...View AnswerShow Answer

The opportunity cost of holding money varies with the _________.

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People tend to hold more money as

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Money is NOT

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Statement I: Branch banking is prohibited in most states. Statement II: All banks are chartered in the states in which they have their headquarters.

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The most responsive to interest rate changes is the _______ demand for money.

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Statement I: The largest American bank is the Bankers Trust. Statement II: No bank in the U.S.has assets of over $200 billion.

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Suppose that an economy has 10 basic goods and services.If it were a barter economy it would need

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Which is NOT considered money?

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Statement I: Over 99% of all banks are members of the FDIC. Statement II: The savings and loan debacle had its origins in the late 1980s.

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Statement I: Large denomination CDs are not part of M2,but are part of M3. Statement II: Small denomination CDs are part of M2,but not of M3.

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M2 = 4,000...
View Answer

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