Question 1

According to the Federal Reserve there is $750 billion in currency in the hands of the public.What percent does the U.S.Treasury estimate is held outside the United States?

Accepted Answer

A)  20-25%
B)  30-40%
C)  50-67%
D)  67-75%E) A) and D)
F) All of the above

Question 2

The S & L debacle ultimately cost American taxpayers

Accepted Answer

A)  at least $10 billion.
B)  about $100 billion
C)  about $200 billion.
D)  between $300 billion and $500 billion.E) None of the above
F) A) and C)

Question 3

Checkable deposits are classified as money because

Accepted Answer

A)  they can be readily used in the making of purchases and payment of debts.
B)  banks hold currency equal to the value of their outstanding deposits.
C)  they are ultimately the obligations of the Treasury.
D)  they earn interest income for the depositor.E) C) and D)
F) B) and D)

Question 4

Most (75%) of the financial transactions are through the use of

Accepted Answer

A)  electronic fund transfers.
B)  credit cards.
C)  checks.
D)  cash.E) A) and B)
F) None of the above

Question 5

If you are asked how much a 2-week vacation in Jamaica is worth,which function of money will you base your answer on?

Accepted Answer

A)  Medium of exchange
B)  Store of value
C)  Standard of deferred payment
D)  Standard of valueE) A) and D)
F) C) and D)

Question 6

The fractional reserve banking system requires that banks hold a certain fraction of their _______ in reserves.

Accepted Answer

The answer of The fractional reserve banking system requires that...

Question 7

The three motives that John Maynard Keynes identified for why people hold money are the ______,________ and _______ motives.

Accepted Answer

precaution...

Question 8

If M2 were 3,000,small denomination time deposits were 300,and large denomination time deposits were 500,how much would M3 be?

Accepted Answer

The answer of If M2 were 3,000,small denomination time deposits...

Question 9

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) B) and C)
F) C) and D)

Question 10

Statement I: One job of money is as a store of value.
Statement II: Money may perform as a standard of value or as a medium of exchange,but not both at the same time.

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 D)

Question 11

The cost of the savings and loan bailout ended up to be about $______.

Accepted Answer

The answer of The cost of the savings and loan...

Question 12

A goldsmith with 100 gold coins in his safe and 400 goldsmith's receipts in circulation has a reserve ratio of

Accepted Answer

A)  400%.
B)  100%.
C)  50%.
D)  25%.
E)  20%.F) B) and D)
G) A) and B)

Question 13

Money is created when someone

Accepted Answer

A)  takes out a bank loan.
B)  pays back a bank loan.
C)  spends money.
D)  saves money.E) None of the above
F) B) and D)

Question 14

Which statement is true?

Accepted Answer

A)  One of the functions of money is that it serves as a receipt for gold.
B)  The most important function of money is that it serves as a medium of exchange.
C)  Barter requires specialization.
D)  None of the statements are true.E) C) and D)
F) B) and D)

Question 15

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) B) and C)
G) A) and E)

Question 16

Why are many banks closing some of their branches?

Accepted Answer

A)  They are replacing them with ATM machines.
B)  They are loosing money in many areas.
C)  They can't find qualified employees.
D)  The banking industry has over built during the Great Recession.E) A) and D)
F) None of the above

Question 17

About how many commercial banks are operating in the United States?

Accepted Answer

A)  8,000
B)  9,000
C)  10,000
D)  Over 15,000E) B) and C)
F) C) and D)

Question 18

Statement I: The U.S.dollar traces its roots back to the old Spanish-milled silver dollar.
Statement II: "Pieces of eight" means eight bits which means one dollar.

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 D)
F) None of the above

Question 19

The largest United States bank in 2010 was

Accepted Answer

A)  BankAmericA.
B)  Citigroup.
C)  J.P.Morgan Chase.
D)  Security Pacific.E) B) and C)
F) None of the above

Question 20

People tend to hold more money as

Accepted Answer

A)  the price level rises and interest rates rise.
B)  the price level falls and interest rates fall.
C)  the price level rises and interest rates fall.
D)  the price level falls and interest rates rise.E) None of the above
F) A) and B)

Exam 13: Money and Banking

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

Correct AnswerverifiedShow Answer

A goldsmith with 100 gold coins in his safe and 400 goldsmith's receipts in circulation has a reserve ratio of

Correct AnswerverifiedShow Answer

If M2 were 3,000,small denomination time deposits were 300,and large denomination time deposits were 500,how much would M3 be?

Correct AnswerverifiedShow Answer

The cost of the savings and loan bailout ended up to be about $______.

Correct AnswerverifiedShow Answer

Why are many banks closing some of their branches?

Correct AnswerverifiedShow Answer

Statement I: The U.S.dollar traces its roots back to the old Spanish-milled silver dollar. Statement II: "Pieces of eight" means eight bits which means one dollar.

Correct AnswerverifiedShow Answer

Most (75%) of the financial transactions are through the use of

Correct AnswerverifiedShow Answer

According to the Federal Reserve there is $750 billion in currency in the hands of the public.What percent does the U.S.Treasury estimate is held outside the United States?

Correct AnswerverifiedShow Answer

The three motives that John Maynard Keynes identified for why people hold money are the ______,________ and _______ motives.

Correct Answerverifiedprecaution...View AnswerShow Answer

Statement I: One job of money is as a store of value. Statement II: Money may perform as a standard of value or as a medium of exchange,but not both at the same time.

Correct AnswerverifiedShow Answer

Money is created when someone

Correct AnswerverifiedShow Answer

The largest United States bank in 2010 was

Correct AnswerverifiedShow Answer

The S & L debacle ultimately cost American taxpayers

Correct AnswerverifiedShow Answer

About how many commercial banks are operating in the United States?

Correct AnswerverifiedShow Answer

Checkable deposits are classified as money because

Correct AnswerverifiedShow Answer

People tend to hold more money as

Correct AnswerverifiedShow Answer

The fractional reserve banking system requires that banks hold a certain fraction of their _______ in reserves.

Correct AnswerverifiedShow Answer

If you are asked how much a 2-week vacation in Jamaica is worth,which function of money will you base your answer on?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which statement is true?

Correct AnswerverifiedShow Answer

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The three motives that John Maynard Keynes identified for why people hold money are the , and _ motives.

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precaution...
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