Ch. 28 ECON

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.

The 12 Federal Reserve Banks can best be characterized as A) central banks, banker's banks, and quasi-public banks. B) regional banks, public banks, and member banks. C) investment banks, banker's banks, and public banks. D) national banks, quasi-public banks, and investment banks.

A) central banks, banker's banks, and quasi-public banks.

Checkable deposits are classified as money because A)they can be readily used in purchasing goods and paying debts. B)banks hold currency equal to the value of their checkable deposits. C)they are ultimately the obligations of the Treasury. D)they earn interest income for the depositor.

A) they can be readily used in purchasing goods and paying debts.

Which of the following does not explain what backs the money supply in the United States? .A)It is backed by gold B)It is widely accepted in transactions. C)It is designated "legal tender" by the federal government. D)It is relatively scarce.

A)It is backed by gold

What "backs" the money supply of the United States? A)the U.S. government's ability to keep the value of money relatively stable B) the amount of gold the U.S. government has on deposit at its banks C) the fact that currency is issued by the Federal Reserve System D) the fact that the intrinsic value of coins in circulation is greater than their face value

A)the U.S. government's ability to keep the value of money relatively stable

When a consumer wants to compare the price of one product with another, money is primarily functioning as a .A) store of value. B) unit of account. C) checkable deposit. D) medium of exchange.

B) unit of account.

Assuming no other changes, if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion, the .A)M1 money supply will decline. B)M1 money supply will not change. C)M2 money supply will decline. D)M2 money supply will increase.

B)M1 money supply will not change.

Consider This) Which of the following is not part of the M2 money supply? .A)currency in circulation B)credit card balances C)small-denominated time deposits of less than $100,000 D)checkable deposits

B)credit card balances

Which of the following functions of money enables society to gain the benefits of geographic and labor specialization? Multiple choice question.A) unit of account B) store of value C) medium of exchange D) medium of deferred payment

C) medium of exchange

Refer to the given list of assets. 1. Large-denominated ($100,000 and over) time deposits 2. Noncheckable savings deposits 3. Currency (coins and paper money) in circulation 4. Small-denominated (under $100,000) time deposits 5. Stock certificates 6. Checkable deposits 7. Money market deposit accounts 8. Money market mutual fund balances held by individuals 9. Money market mutual fund balances held by businesses 10. Currency held in bank vaults The M1 definition of money includes item(s) .A)6 only. B)3, 4, and 6. C)3 and 6. D)3, 6, and 10.

C)3 and 6.

Which of the following is the basic economic policy function of the Federal Reserve Banks? A)holding the deposits or reserves of commercial banks B)acting as fiscal agents for the federal government C)controlling the supply of money D)collecting or clearing checks among commercial banks

C)controlling the supply of money

Purchasing groceries using a debit card best exemplifies money serving as a A)store of value. B)unit of account .C)medium of exchange. D)index of satisfaction.

C)medium of exchange.