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- 1. Multiple Choice
You receive money as payment for babysitting your neighbor's children. This best illustrates which function of money?
Medium of exchange
Unit of exchange
Store of value
Liquidity
- 2. Multiple Choice
Eliza buried money in the backyard to use in an emergency.
Which of the three functions of money is described here?
Store of value
Unit of Account
Hedge against inflation
Medium of exchange
- 3. Multiple Choice
Which of the following best defines money?
Currency that has intrinsic value, such as gold coins
Paper currency or coins
Cash held in bank
Any asset that is accepted as a way of paying for something
- 4. Multiple Choice
The Central Bank does all except which of the following
It controls the supply of money
It acts as a lender of last resort for banks
It makes loans to large business firm
It tries to ensure the health of the banking system
- 5. Multiple Choice
M1 includes savings deposits
True
False
- 6. Multiple Choice
If the Reserve Ratio is 10%, the money multiplier is
100
10
9/10
1/10
- 7. Multiple ChoiceThis term refers to the ease with which you can convert an asset to cash with little or no loss of purchasing power.legal tenderacceptabilityliquidityuniformity
- 8. Multiple Choice
Our current money is _______ money. Meaning that it has value because the government has ordered that it is an acceptable means to pay debts.CommodityFiatRepresentativeFunny - 9. Multiple ChoiceThe exchange of goods and services without using money is known as...near money.bartering.double coincidence of wants.fiat money.
- 10. Multiple ChoiceWhich of the following statements is correct?All items that are included in M1 are included also in M2.All items that are included in M2 are included also in M1.Credit cards are included in both M1 and M2.Savings deposits are included in both M1 and M2.
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