Fall Economics Exam Part 1 Questions 1-25

Front

Based on the information in the table, which economic condition is characteristic of all three nations? Options: a. Low GDP per capita, b. High levels of inflation, c. Low inflationary levels, d. High levels of unemployment

Back

Low inflationary levels

Front

Commodity money can best be described as--

Back

a form of money which has an intrinsic value, worth something in its own right rather than being a token of financial value

Front

During an economic recession the Federal Reserve Banks will most likely react by--

Back

easing monetary policy making it easier to lend money

Front

Money that has value simply because the government says it does is called--

Back

Fiat money

Front

What is one way the U.S. economy can be adversely affected when interest rates are lowered? Options: a) Prices may inflate, b) Tax rates may decrease, d) Unemployment may increase

Back

Less capital may be available

Front

The most effective way to manage credit card debt is by--

Back

Paying off the balance each month

Front

Which scenario is most likely to result when the Federal Reserve raises the reserve requirement? a) More money is required to be kept in banks to loan out to businesses so they can invest in their companies b) More money is required to be kept in bank reserves, and less is available to be loaned out to businesses to invest in the economy c) More money is required to be kept in the Federal Reserve banks to make it available for loans to member banks in poor economic times d) More money is required to be kept in the Federal Reserve Banks, which increases the amount of money in circulation and stimulates the economy

Back

More money is required to be kept in bank reserves, and less is available to be loaned out to businesses to invest in the economy.

Front

Which of the following accurately completes the graphic? a) Types of money, b) Federal reserve notes, c) Characteristics of money, d) Functions of money

Back

Functions of money

Front

One of the primary functions of financial institutions in an economy is to--

Back

Provide access to capital for people and businesses

Front

Which type of bank account is not insured? a) Checking accounts, b) Savings accounts, c) Mutual Fund, d) Money Market accounts

Back

Mutual Fund