Econ Chapter 16 1/2

Demand deposits are included in

. M1 and M2.

Credit card limits are included in

. neither M1 nor M2.

Which of the following is included in M2 but not in M1?

. savings deposits

Traveler's checks are included in

M1 and M2.

Money market mutual funds are included in

M2 but not M1

Which of the following best illustrates the medium of exchange function of money?

You pay for your oil change using currency.

Prisoners sometimes determine a single good to be used as money. This good becomes

a medium of exchange and a unit of account.

Any item that people can use to transfer purchasing power from the present to the future is called

a store of value.

When in France you notice that prices are posted in euros, this best illustrates money's function as

a unit of account.

Which of the following is a function of money?

a. a unit of account b. a store of value c. medium of exchange

Money

a. is more efficient than barter. b. makes trades easier. c. allows greater specialization

The New York Federal Reserve Bank

a. president always gets to vote at the FOMC meetings. b. conducts open market transactions. c. is one of 12 regional Federal Reserve Banks.

The members of the Federal Reserve's Board of Governors

are appointed by the president of the U.S. and confirmed by the U.S. Senate.

Demand deposits are a type of

checking account.

Currently, U.S. currency is

fiat money with no intrinsic value.

The existence of money leads to

greater specialization and to a higher standard of living

. Fiat money

has no intrinsic value

Paper money

is valuable because it is generally accepted in trade.

You pay for cheese and bread from the deli with currency. Which function of money does this best illustrate?

medium of exchange

Commodity money is

money with intrinsic value.

Currency includes

paper bills and coins.

Which group within the Federal Reserve System meets to discuss changes in the economy and determine monetary policy?

the FOMC

The agency responsible for regulating the money supply in the United States is

the Federal Reserve

. Liquidity refers to

the ease with which an asset is converted to the medium of exchange.

M1 equals currency plus demand deposits plus

traveler's checks plus other checkable deposits.

When we measure and record economic value, we use money as the

unit of account