Unit 4 AP Macro Quizzes

Money that derives is value by government decree is known as:

Fiat Money

Who appoints members to the Federal Reserve Board of Governors?

The President of the United States

United States currency is currently backed by which of the following?

The full faith and credit of the U.S. Government

Which of the following will happen when interest rates increase in an economy?

The opportunity cost of holding money will increase.

As a result of the Fed selling government securities, what will happen to interest rates?

They will increase.

All federally chartered banks are members of the federal reserve system.

True

The supply curve is ___________________________ for the money market graph, whereas in the loanable funds market graph, it is positively sloped.

Vertical

Which term describes the accumulated sum of one's assets?

Wealth

When will the Fed practice expansionary monetary policy?

When the economy is experiencing a recession

Which of the following is a function of money?

store of value, unit of account, medium of exchange

Debit cards, credit cards, checks and gift cards are examples of which type of money?

Representative Money

Which of the following is true for bonds but not for stocks?

Bonds are interest-bearing assets.

Which of the following is considered the most liquid asset?

Cash

Currency that has some alternative value or use besides being used as money, is called:

Commodity Money

If the Fed expands the money supply too quickly, which of the following do economists fear?

Inflation

Which of the following is not one of the Fed's tools of monetary policy?

International operations

Which of the following best describes the relationship between interest rates and the price of previously issued bonds?

Inverse

Hard Currency (Cash) + Checkable Deposits = ???

M1

"Unit of Account" is another way of expressing which function of money?

Measure of Value

Which function of money implies that you can purchase goods and services with it?

Medium of exchange

Who owns the Fed?

Member banks

Which of the following cities is not a location of a Federal Reserve District Bank?

Phoenix, Arizona