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1. If you write a check on a bank to purchase a used Honda Civic, you are using money primarily as:

a. A medium of exchange.

b. A store of value.

c. A unit of account.

d. An economic investment.

2. To say that coins are "token money" means that:

a. Their face value is less than their intrinsic value.

b. Their face value is greater than their intrinsic value.

c. Their face value is equal to their intrinsic value.

d. They are not legal tender.

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Mahe Alam
Mahe AlamLv10
19 Jan 2021

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Related questions

1. To say money is socially defined means that:

A) the money supply includes all public and private securities purchased by society.

B) whatever performs the functions of money extremely well is considered to be money.

C) society, acting through Congress, specifies what shall be included in the money supply.

D) money has been defined in a Constitutional amendment.

 

2. Money functions as:

A) a medium of exchange.

B) a store of value.

C) a unit of account.

D) all of these.

 

3. If you are estimating your total expenses for school next semester, you are using money primarily as:

A) a store of value.

B) an economic investment.

C) a unit of account.

D) a medium of exchange.

 

4. If you place a part of your summer earnings in a savings account, you are using money primarily as a:

A) medium of exchange.

B) store of value.

C) standard of value.

D) unit of account.

 

5. If you write a check on a bank to purchase a used Honda Civic, you are using money primarily as:

A) a store of value.

B) a medium of exchange.

C) a unit of account.

D) an economic investment. 

 

6.  A $70 price tag on a sweater in a department store window is an example of money functioning as a:

A) standard of deferred payments.

B) medium of exchange.

C) unit of account. 

D) store of value.

 

7. Stock market price quotations best exemplify money serving as a:

A) index of satisfaction.

B) store of value.

C) medium of exchange.

D) unit of account. 

 

8.  Purchasing common stock by writing a check best exemplifies money serving as a:

A) medium of exchange. 
 
B) unit of account.
 
C) index of satisfaction.
 
D) store of value.

 

 

 

 

In defining money as M1, economists exclude time deposits because:

a. the intrinsic value of time deposits is nil.

b. the purchasing power of time deposits is much less stable than that of checkable deposits and currency.

c. they are not directly or immediately a medium of exchange.

d. they are not recognized by the Federal government as legal tender.

10. Which of the following instruments would most likely be utilized in the direct finance market?

A) Bank commercial loans. B) U.S. Treasury Bills.

C) Commercial Paper. D) Equities.

11. The managers of a firm met with a loan officer from a local bank to apply for a loan. They told the bank's loan

officer that the loan is intended to finance an expansion in the company’s production facility. Based on this

information, the loan officer granted the loan. However unexpected tariffs increased the cost of raw materials

needed in the production process and the loan had to be used to pay for materials rather than the planned

expansion. This incident is an example of

A) moral hazard.

B) market risk.

C) adverse selection.

D) banks' failing to charge high enough interest rates on business loans.

E) a situation in which direct finance, rather than indirect finance, should be employed.

12. From the choices below, indicate what is likely the most important asset category (in terms of $ value) in a

Money Market Mutual Fund.

A) Corporate Bonds B) Treasury Bills C) Non-Negotiable CDs D) Equities

13. Compared to interest rates on long-term U.S. Treasury debt, interest rates on short-term U.S. Treasury debt tends to

fluctuate________ and is usually __________ over time.

A) more: higher B) less: lower C) more; lower D) less; higher

14. Which of the following is true about legal tender?

A) Only legal tender may be used to pay taxes in the U.S.

B) Having legal tender status from the government is sufficient for something to be used as money.

C) Cash and checking accounts are legal tender.

D) None of the above is accurate.

15. When economists refer to the role of money as a unit of account, they mean that

A) most accounting systems reflect that goods are purchased with currency.

B) all goods are priced in terms of all other goods.

C) money gives traders a single, consistent way of measuring value in the economy.

D) money makes it possible for specialization to take place.

E) agents do not have to exercise their claim on scarce resources immediately.

16. The Federal Reserve System:

A) is required to make loans in the Fed Funds market

B) is required to create the money necessary for the U.S. Government to pay its bills.

C) is required to make loans to the U.S. Treasury.

D) is required to maintain price stability.

17. The interest rate that the Fed targets to indicate its stance on monetary policy is known as:

A) the discount rate. B) the prime rate. C) the fed funds rate. D) the standard rate.

18. Of money's three functions, the one that allows us to make decisions that maximize our satisfaction is its function as a

A) medium of exchange B) unit of account. C) standard of deferred payment D) store of value.

19. In the United States, money is backed by

A) gold and silver. B) Federal Reserve notes.

C) Congress D) Social infrastructure, political stability, and economic potential.

20. Which of the following would not be considered to be part of the money supply?

A) Currency in ATM machines

B) Coins stored in children’s piggy banks

C) U.S. Federal Reserve notes being used for transactions in India

D) A & B above

E) None of the above. All are part of the U.S. money supply.

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