AP Macro: Money and Banking

Front

The fact that money must withstand the wear and tear that comes from being used over and over again is a measure of its

Back

Durability

Front

Money that can be easily divided into smaller units of value has the characteristic of

Back

Divisibility

Front

If Takeoff withdraws a $100 bill from his checking account and Quavo deposits another $100 bill in his savings account, by how much will M1 and M2 change?

Back

M1 will decrease, but M2 will remain the same.

Front

Which of the following is an example of money as a unit of account? Options: Purchasing a toy for $8.99, Lending a friend $25.00, Opening a savings account at a bank, Checking the price of a camera at several stores before buying it at the lowest price

Back

Checking the price of a camera at several stores before buying it at the lowest price

Front

The coins and paper bills used as money in a society

Back

Currency

Front

An institution for receiving, keeping and lending money

Back

Bank

Front

What is the price paid for the use of borrowed money?

Back

Interest

Front

When money is used to acquire goods and services, it is functioning as a

Back

Medium of exchange.

Front

Bradley digs out $50 from his cookie jar and deposits it in his checking account. The immediate result of this transaction is that M1 has

Back

Not changed.

Front

1/required reserve ratio determines the

Back

money multiplier