Economics honors Review: Money

When economists say that money serves as a medium of exchange, they mean that it is: A.) a way to keep wealth in a readily spendable form for future use. B.) a means of payment C.) a monetary unit for measuring and comparing the relative values of goods D.) declared as legal tender by the government

B.) a means of payment: Because

If you place a part of your summer earnings in a savings account, you are using money primarily as a: A.) a medium of exchange B.) a store of a value C.) a unit of account D.) an economic investment

B.) a store of value: Because

The seven members of the Board of Governors of the federal reserve system are:

appointed by the president with the confirmation of the Senate

The amount that a commercial bank can lend is determined by its:

excess reserves

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 a value C.) a unit of account D.) an economic investment

A.) a medium of exchange: Because

In the United States, the money supply (MI) is comprimised of: A.) coins, paper currency, and checkable deposits B.) currency, checkable deposits, and Series E bonds. C.) coins, paper currency, and credit balances with brokers D.) paper currency,coins, gold certificates, and time deposits

A.) coins, paper currency, and checkable deposits

The largest component of the money supply ( MI) is: A.) gold certificates B.) checkable deposits C.) paper money in circulation D.) coins

B.) checkable deposits: Because

Currency in circulation is part of:

M1,M2, and M3

The Board of Governors of the Federal Reserve has ___ members.

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Which of the following is true about the U.S. Federal Reserve System: A.) There are 10 regional Federal Reserve Banks B.) The head of the U.S. Treasury also chairs the Federal Reserve Board. C.) There are seven members of the Federal Reserve Board D.) The Open Market

C.) There are seven members of the Federal Reserve Board

If you are estimating your total expenses for school next semester, you are using money primarily as: A.) a medium of exchange B.) a store of a value C.) a unit of account D.) an economic investment

C.)a unit of account: Because

The paper money used in the United States is: A.) National Bank Notes B.) Treasury Notes C.) United States Notes D.) Federal Reserve Notes

D.) Federal Reserve Notes: Because

Which of the following is not part of the M2 money supply: A.) money market mutual funds balances B.) money market deposit accounts C.) currency D.) large ($100,000 or more) time deposits

D.) large ($100,000 or more) time deposits

The three formal Advisory Councils to the Board of Governors are the:

Federal Advisory Council, Thrift Institutions Advisory Council,and the counselor advisory council

The group that sets the Federal Reserve Systems policy on buying and selling government securities (bills notes and bonds) is the:

Federal Open Market Committee (FOMC)

In the U.S. economy the money supply is controlled by the:

Federal Reserve System

Money market deposit accounts are included in:

both M2 and M3

The twelve Federal Reserve Banks:

hold the reserve deposits of commercial banks

The federal reserve system:

is basically an independent agency

Fiat Money is:

money because the government asserts that it is

Credit card balances are:

not a component of M1,2, or 3

The members of the Federal Reserve Board:

serve 14-year terms

The baisic policy-making body in the U.S. banking system is:

the Board of Governors of the Federal Reserve

In defining money as M1 economists exclude time deposits:

they are not directly or immediately a medium of exchange

Checkable deposits are classified as money because:

they can be readily used in purchasing goods and paying debts