Quiz - Exercise 1.5

Electronic funds transfer (a) involves making and receiving payments via computers and other automated means (b) is the amount of demand deposits held at banks (c) is a payment procedure in- volving the use of checks (d) involves the transfer of funds from the Federal Reserve to member banks.

(a) involves making and receiving pay- ments via computers and other automated means

One positive aspect of a barter economy is that (a) people can exchange products without currency (b) people rely on checks for money (c) people can make exchanges more easily than in a money economy (d) paper money is printed by the government

(a) people can exchange products without currency

Which one of the following people is the endorser of a check? The one who (a) writes his or her name on the back of the check (b) originally wrote the check (c) makes payment on the check (d) printed the check.

(a) writes his or her name on the back of the check

How is fiat money unlike commodity money? (a) fiat money is not used in the United States (b) fiat money is valuable only because government says it is (c) commodity money has no value other than as money (d) commodity money is the common form of money today

(b) fiat money is valuable only because government says it is

A main idea of this chapter is that (a) our economy can function without money (b) money serves as a medium of exchange, a way of calculating value, and a method of saving (c) cash is a better way of making payments than electronic funds transfer (d) checks are always a better way of making payments than cash.

(b) money serves as a medium of exchange, a way of calculating value, and a method of saving

Under which of the following circumstances would beads be considered money? (a) You said they were money. (b) They were very valuable. (c) You could buy something with them anywhere in the United States. (d) They were very rare.

(c) You could buy something with them anywhere in the United States.

Suppose that you melted down $100 in quarters. What would be the value of the metal? (a) equal to its weight in gold (b) much more than $100 (c) much less than $100 (d) exactly $100.

(c) much less than $100

Your local bank finds itself running short of the $1, $5, and $10 bills it will need to take care of its customers' needs. Where is it most likely to go to stock up on this currency? (a) the U.S. Treasury Department (b) a neighboring bank (c) the Bureau of the Mint (d) the Federal Reserve Bank of its district.

(d) the Federal Reserve Bank of its district.

depositor

a person who places money in an account in a bank for safety and earnings

barter

a system in which people exchange goods or services

Bureau of the Mint

an organization that manufactures U.S. coins

Federal Reserve System

an organization that regulates the nation's banks and its money supply

money

anything generally accepted in payment for goods and services

currency

money that is easy to carry because it is paper

monetary unit

the standard unit of value of a country's currency

electronic funds transfer (EFT)

the use of computers to receive and make payments