Question 1. Which of these are a role for money?
- double coincidence of wants
- law of demand
Question 2 Money is stable when
- its purchasing power does not vary over time,
- it is portable,
- it can be divided into smaller units, like change.
- it is widely accepted for payment.
Question 3 The U.S. dollar is an example of
- inconvertible fiat money
- the gold standard
- barter exchange
- commodity money
Question 4 Which of these is NOT a function of banks:
- they bring together savers and borrowers.
- they are responsible for the conduct of monetary policy
- safe places for people to store their wealth
- they help to facilitate trade by providing alternative methods of payment
Question 5 Supply side economics
- espouses that tax cuts will increase aggregate demand and stimulate economic growth
- espouses that tax cuts will increase aggregate supply and stimulate economic growth
- is generally accepted by mainstream economists
- has proven to be effective in stimulating the U.S. economy
Question 6 Which of the following is NOT true of inflation
- it is affected by the growth of the money supply
- it describes both increases in prices and decreases in prices
- it is commonly measured by the CPI - the Consumer Price Index
- it describes an increase in the over-all level of prices of goods and services
Question 7 The CPI measures
- measures the prices of all goods purchased by individuals and non-profit institutions
- the average cost of the goods and services purchased by consumers
- the average cost of goods and services purchased by individuals and firms
- the average price of food and fuel, the most volatilely-priced purchased goods
Question 8 Which of the following describes a monetary policy?
- government issuance of U.S. securities
- increase in tax rates
- infrastructure spending
- federal open market operation
Question 9 Which of these are causes of the Great Recession?
- federal government tax cuts
- weak banking regulation combined with rampant financial innovation
- excessive banking regulation combined with rampant banking innovations
- large federal deficit
Question 10 Which of the following describes an expansionary monetary policy? (Please select all correct answers)
- A decrease in the reserve ratio
- FOMC directive to purchase securities
- FOMC directive to sell securities
- Increase in the overnight federal funds rate