Ch. 10 - Money and Banking

Front

Which function of money allows stores to have a standard price system for the goods and services they sell?

Back

Unit of Account

Front

Money by government decree, has no alternative value or use as a commodity

Back

fiat

Front

Which characteristic of money is crucial for it to last awhile in circulation?

Back

durability

Front

Which of the following is actually a loan given to banks from consumers? checking accounts, certificates of deposit, savings accounts, savings bonds

Back

certificates of deposit

Front

Which of the following is one of the three functions of money? Options: portability, scarcity, store of value, divisibility

Back

store of value

Front

Which of the following characteristic ensures that our money maintains its value over time? scarcity, uniformity, divisibility, durability

Back

scarcity

Front

How do banks increase the money supply?

Back

By issuing loans with their excess reserves

Front

If a consumer deposits $500 in the bank and the bank has to keep 10% in reserve, how much must they keep?

Back

$50

Front

Using the money multiplier formula (1/RR), how much "new" money can be created with a RR of .25 and an initial excess reserve of $800?

Back

$3200

Front

A $5000 deposit is made. The current reserve ratio is .1. How much money will the bank have in excess reserves?

Back

$4500