Question 1

Of the total M1,currency accounts for a little more than ______%.

Accepted Answer

A)  20
B)  30
C)  40
D)  50E) A) and D)
F) None of the above

Question 2

Even though credit cards are used by many people in making purchases,they are not included in the M1.A major reason is that

Accepted Answer

A)  credit cards are a way of going into debt,whereas the components of M1 represent assets.
B)  credit cards had not yet been invented when money was defined.
C)  some credit cards are issued by stores (such as Sears) ,whereas all money is issued by banks.
D)  credit cards are much less liquid than M1.
E)  credit cards don't affect consumer expenditures,whereas M1 does.F) B) and D)
G) B) and C)

Question 3

Each of the following played a role in causing the savings and loan associations to go bankrupt in the 1980s except

Accepted Answer

A)  laws restricting assets S & Ls could purchase.
B)  organized crime.
C)  real estate speculators.
D)  junk bond purchases.E) A) and B)
F) A) and C)

Question 4

A medium of exchange is

Accepted Answer

A)  the only job of money.
B)  the least important job of money.
C)  the most important job of money.D) B) and C)
E) None of the above

Question 5

In the last four decades our money supply

Accepted Answer

A)  grew every year.
B)  fell every year.
C)  grew in about half the years and fell the other years.
D)  grew almost every year and only fell in a few years.E) B) and C)
F) A) and B)

Question 6

The largest United States bank in 2010 was

Accepted Answer

A)  BankAmericA.
B)  Citigroup.
C)  J.P.Morgan Chase.
D)  Security Pacific.E) C) and D)
F) B) and C)

Question 7

The unintended consequences of the federal deregulation of the interest paid depositors in the savings and loans was

Accepted Answer

A)  increasing the interest rates in the national money market
B)  increasing the amount of the loss on existing loans
C)  allowing management to make riskier loans
D)  affecting the interest rates on existing long term loansE) A) and B)
F) A) and C)

Question 8

In the late 1980s,our money supply

Accepted Answer

A)  grew at an increasing rate.
B)  grew at a steady rate.
C)  grew at a decreasing rate.
D)  did not grow.
E)  declined in size.F) A) and D)
G) None of the above

Question 9

The desire to hold money instead of other assets in anticipation of changes in economic conditions is the ________ motive.

Accepted Answer

The answer of The desire to hold money instead of...

Question 10

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) None of the above
F) B) and D)

Question 11

The transaction demand for money is most clearly related to its use as a

Accepted Answer

A)  medium of exchange.
B)  standard of value.
C)  measure of value.
D)  store of value.
E)  standard of deferred payment.F) B) and D)
G) A) and B)

Question 12

Statement I: Financial intermediaries repackage the flow of deposits,insurance premiums,and pension contributions into larger chunks that are lent out.
Statement II: Banks are one of several types of financial intermediaries.

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) All of the above
F) A) and D)

Question 13

People tend to hold more money as

Accepted Answer

A)  the price level rises and credit availability rises.
B)  the price level rises and credit availability falls.
C)  the price level falls and credit availability falls.
D)  the price level falls and credit availability rises.E) B) and D)
F) B) and C)

Question 14

Which of the following is not a function of money?

Accepted Answer

A)  Medium of exchange
B)  Income generation
C)  Standard of value
D)  Store of valueE) None of the above
F) C) and D)

Question 15

Banking began in

Accepted Answer

A)  biblical times.
B)  medieval times.
C)  the 19th century.
D)  the 20th century.E) C) and D)
F) B) and D)

Question 16

Currency is included in

Accepted Answer

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

Question 17

Membership in the Federal Reserve System

Accepted Answer

A)  is limited to national banks.
B)  is limited to state banks.
C)  is required of national banks and open to state banks.
D)  is forbidden to state banks.E) All of the above
F) None of the above

Question 18

There are about (write number)______ commercial banks operating in the United States.

Accepted Answer

The answer of There are about (write number)______ commercial banks...

Question 19

The transactions demand for money is most closely related to its job as a _________.

Accepted Answer

The answer of The transactions demand for money is most...

Question 20

The bulk of the M1 money supply is made up of

Accepted Answer

A)  travels checks.
B)  checkable deposits.
C)  Federal Reserve notes.
D)  currency.E) All of the above
F) A) and D)

Exam 13: Money and Banking

In the last four decades our money supply

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Membership in the Federal Reserve System

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Which of the following is not a function of money?

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Currency is included in

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The unintended consequences of the federal deregulation of the interest paid depositors in the savings and loans was

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The transaction demand for money is most clearly related to its use as a

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The transactions demand for money is most closely related to its job as a _________.

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The bulk of the M1 money supply is made up of

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Of the total M1,currency accounts for a little more than ______%.

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There are about (write number)______ commercial banks operating in the United States.

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Statement I: Financial intermediaries repackage the flow of deposits,insurance premiums,and pension contributions into larger chunks that are lent out. Statement II: Banks are one of several types of financial intermediaries.

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Checkable deposits are classified as money because

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A medium of exchange is

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Even though credit cards are used by many people in making purchases,they are not included in the M1.A major reason is that

Correct AnswerverifiedShow Answer

Each of the following played a role in causing the savings and loan associations to go bankrupt in the 1980s except

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Banking began in

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The largest United States bank in 2010 was

Correct AnswerverifiedShow Answer

In the late 1980s,our money supply

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The desire to hold money instead of other assets in anticipation of changes in economic conditions is the ________ motive.

Correct AnswerverifiedShow Answer

People tend to hold more money as

Correct AnswerverifiedShow Answer

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