Money Basics

Money Basics

By Kendrick Broadus

Multiple Choice

A saving account in a bank represents the function of money:

• Store of value

• A medium of exchange

• A standard for deferred payments

• A measure of value

Multiple Choice

Choose the most accurate definition of "money".

• Money is anything generally accepted in payment for goods or services or in the repayment of debts.

• Money is anything recognized in trading and transaction for goods.

• Money is legal currency that is released by banks to satisfy the financial needs of the people.

Multiple Choice

A medium of exchange is_______

• something that is generally acceptable in exchange for goods and services

• a legally recognized asset that is generally accepted in exchange for goods and services.

• something that circulates and provides a standardized means of evaluating the relative price of goods and services.

• The ability of money to command purchasing power in the future

Multiple Choice

A saving account in a bank represents the function of money:

• Store of value

• A medium of exchange

• A standard for deferred payments

• A measure of value

Multiple Choice

Choose the most accurate definition of "money".

• Money is anything generally accepted in payment for goods or services or in the repayment of debts.

• Money is anything recognized in trading and transaction for goods.

• Money is legal currency that is released by banks to satisfy the financial needs of the people.

Multiple Choice

Which of the following is not a medium of exchange?

• Easily standardized

• Divisible

• Quickly become less valuable

• Widely rejected

Multiple Choice

For which function, money is accepted as a unit of account?

• Measure of value,

• Medium of exchange

• Standard of deferred payment

• Store of value

Multiple Choice

Money serves as a unit of account. This means that________

• money is a common measure of value

• money is a means of calculating relative prices of goods and services.

• money is the value in exchange of all goods and services

• all of these

Multiple Choice

The difference between representative money and fiat money is that

• representative money is worth more than fiat money.

• fiat money is counted in coins; representative money is counted in paper dollars.

• fiat money is more durable than representative money.

• representative money is backed by silver or gold, ; fiat money is not.

Multiple Choice

This is money that has another useful purpose.

• fiat
• commodity
• debt
• securities

Multiple Choice

A type of money that is backed by a material, such as gold, is referred to as

• certificate money

• representative money

• fiat money

• commodity money

Multiple Choice

Commodity money can be best described as money that is

• backed up by a valuable material

• valuable based on the material that the money is made from

• used to purchase valuable materials

• valuable because a government says it is and people accept that it is valuable

Multiple Choice

What is NOT a characteristic of money? 

• Divisible
• Portable
• Acceptable
• Accessible

Multiple Choice

What characteristic of money the picture represents? 

• Divisible
• Acceptable
• Portable
• Stable 

Multiple Choice

What characteristic of money the picture represents? 

• Acceptable
• Scarce
• Durable
• Stable 

Multiple Choice

What characteristic of money the picture represents? 

• Scarce
• Divisible
• Stable
• Durable 

Multiple Choice

Easily transferred from 1 person to another, to make the exchange of money for products easier.

• Durability

• Portability

• Divisibility

• Scarcity

Multiple Choice

Money has what if it can be broken down into smaller units so it can be used as needed?

• Divisibility

• Portability

• Scarcity

• Durability

Multiple Select

What are the 3 functions of money?

• Measure of Gold

• Store of Value

• Medium of Exchange

• Store of Bank Notes

• Measure of Value

Multiple Choice

Putting money into a bank is called ...

• to withdraw

• to deposit

• to endorse

• to sign

Multiple Choice

Decisions by depositors to increase their holdings of ________, or of banks to hold ________ will result in a smaller expansion of deposits than the simple model predicts.

• deposits; required reserves

• deposits; excess reserves

• currency; required reserves

• currency; excess reserves

Multiple Choice

Money supply refers to :

• Total volume of money held by the public at a particular point of time

• Total volume of money held by the public at a period of time

• Total amount of money held by Government

• Both A & B

Multiple Choice

the M1 money supply includes which of the following?

• near money

• checkable deposits

• savings accounts

Multiple Choice

which of the following is part of the money supply but not part of the monetary base?

• checkable bank deposits

• bank reserves

• savings accounts

Multiple Select

Name the savings plan(s) that accumulate interest.

• Money Market Accounts

• Certificates of Deposit

• US Savings Bonds

Multiple Choice

Financial Institutions include:

• Banks

• Savings & Loans

• Credit Unions

• All of the above

Multiple Choice

A certain % of checkable deposits that banks keep on reserve.

• Reserve Requirement

• Excess Reserves

• Savings

• Fractional Reserve

Multiple Choice

The amount banks hold beyond required reserve; amount that banks can lend.

• Reserve Requirement

• Excess Reserves

• Multiplier

• Expansionary Effect