The functions of money are to serve as a: |
Unit of account, store of value, and medium of exchange |
When a consumer wants to compare the price of one product with another, money is primarily functioning as a: |
Unit of account |
When a banker records how many dollars each of his borrowers owes the bank, money is serving as a: |
Unit of account |
What function is money serving when you deposit money in a savings account? |
A store of value |
What function is money serving when you use it when you go shopping? |
A medium of exchange |
If product prices were stated in terms of tobacco leaves, then tobacco leaves would be functioning primarily as: |
A unit of account |
One major advantage of money serving as a medium of exchange is that it allows society to: |
Escape the complications of barter |
Money eliminates the need for a coincidence of wants in trading primarily through its role as a: |
Medium of exchange |
An asset’s liquidity refers to its ability to be: |
A means of payment |
Currency and checkable deposits are: |
The major components of money supply M1 |
The paper currencies of the U.S. are also called: |
Federal Reserve notes |
The M1 money supply is composed of: |
Checkable deposits and currency in circulation |
Which definition(s) of the money supply include(s) only items which are directly and immediately usable as a medium of exchange? |
M1 |
Checkable deposits are included in: |
both M1 and M2 |
People can generally get the following items at their commercial banks, except: |
Money market mutual funds |
Which of the following "backs" the value of money in the United States? |
The acceptability of it as a medium of exchange |
United States currency has value primarily because it: |
Is relatively scarce, is legal tender, and is generally acceptable in exchange for goods and services |
The Federal backing for money in the United States comes from: |
Controlling the money supply in order to keep the value of money relatively stable over time |
What "backs" the money supply of the U.S.? |
The U.S. government’s ability to keep the value of money relatively stable |
When paper money is designated as legal tender, it means that: |
It is a means of payment by law |
When there is inflation in the economy, it implies that the: |
Price index is rising and the purchasing power of money is falling |
To keep high inflation from eroding the value of money, monetary authorities in the United States: |
Control the supply of money in the economy |
The Federal Reserve Banks are owned by the: |
Member banks |
The Federal Reserve System consists of which of the following? |
Board of Governors and the 12 Federal Reserve Banks |
How many members can serve on the Board of Governors of the Federal Reserve System? |
7 |
How long is the term of office for members appointed to serve on the Board of Governors of the Federal Reserve System? |
14 years |
When was the Federal Reserve System established? |
1913 |
The Federal Reserve System of the U.S. is the country’s: |
Central bank |
Members of the Federal Reserve Board of Governors are: |
Appointed by the President to staggered 14-year terms |
Which group assists the Board of Governors of the Federal Reserve System in determining monetary policy? |
Federal Open Market Committee |
The Federal Open Market Committee (FOMC): |
Sets policy on the sale and purchase of government bonds by the Fed |
The Federal Open Market Committee (FOMC) of the Federal Reserve System is primarily for: |
Setting the Fed’s monetary policy and directing the purchase and sale of government securities |
The twelve Federal Reserve Banks can best be characterized as: |
Central banks, banker’s banks, and quasi-public banks |
The most important of the Federal Reserve district banks is the: |
New York bank |
How many Federal Reserve Banks are there? |
12 |
The Federal Reserve System is divided into: |
12 districts |
Holding the money deposits of businesses and households and making loans to the public are the basic functions of: |
Commercial banks and thrift institutions |
Which of the following is the most important function of the Federal Reserve System? |
Controlling the money supply |
The Federal Reserve System is an: |
Independent agency of government |
The Financial Crisis of 2007-2008 started in which sector of the economy? |
Real estate and housing sector |
Econ Final 14
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