ECON 2I03 Study Guide - Midterm Guide: Barter, Commodity Money, Payment System
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1. What determines the acceptability of dollar bills as a medium of exchange? |
A. our society's willingness to use green paper notes issued by the Federal Reserve as money
B. the willingness of the Federal Reserve to redeem dollar bills for gold
C. the willingness of the U.S. Treasury to redeem dollar bills for gold
D. the public's fear that failing to accept dollar bills will trigger a hyperinflation
2. The attribute that distinguishes money from other assets is that only money |
A. retains its value during times of inflation.
B. is counted in determining the size of an individual's wealth.
C. serves as a medium of exchange.
D. may be used as collateral for a bank loan.
3. When economists refer to the role of money as a standard of deferred payment, they mean that |
A. payments by checks are usually deferred until the checks clear the bank.
B. money earns interest while loan payments are deferred.
C. money provides a standard for payments that will occur in the future.
D. money today is worth less than money tomorrow.
Question 1. Which of the following is not included in M1?
a- currency
b- demand deposits
c- traveller's checks
d- credit cards
b- exactly $200. c- less than $200. d- None of the above are correct. |
b- M2 but not M1. c- M1 and M2. d- neither M1 nor M2. |
b- are a store of value. c- have led to wider use of currency. d- are part of the money supply. |
b- 20 percent. c- 80 per cent. d- 100 per cent. |
b- serves as a medium of exchange but not as a unit of account. c- is commodity money. d- has no intrinsic value. |
b- $125; one explanation for this relatively small average is that U.S. citizens hold a lot of foreign currency. c- $3,700; one explanation for this relatively large amount is that criminals probably prefer currency as a medium of exchange. d- $3,700; one explanation for this relatively large average is that U.S. citizens hold a lot of foreign currency. |
b- it is a medium of exchange. c- it is a unit of account. d- it has intrinsic value. |
b- government bonds are conducted at the New York Fed's trading desk. c- real estate and other real assets are conducted by the Federal Open Market Committee. d- All of the above are correct. |
b- inflation in the long run and employment and production in the long run. c- inflation in the short run and employment and production in the short run. d- inflation in the short run and employment and production in the long run. |