Money, fiscal and Monetary policy

Money must be easy to carry. 

• Durability
• Divisibility
• Store of Value
• Portability

Money that has value because the Government declared that it is money.

• Fiat Money
• Commodity Money
• Currency
• Coins

All units of money must be identical so that people recognize it.

• Divisibility
• Unit of Account
• Uniformity
• Portability

Which of the following results should be included where the question mark appears in the illustration?

• the reserve requirement
• interest rate
• inflation
• unemployment

Money loses its value when it

• It becomes too plentiful
• becomes too portabale
• is divisible
• is durable

What dollar amount should appear in place of the letter P in the table?

• $1,000,000
• $100,000
• $1,900,000
• $1,900

What dollar amount should appear in place of the letter S in the table?

• $200,000
• $1,800,000
• $2,200,000
• $1,800

If the Federal Reserve raises interest rates to combat rapid inflation, what might be a negative outcome?

• Unemployment rates would rise
• taxes will rise 
• The government would put a freeze on prices
• international trade would stop 

If the Federal Reserve System wanted to stimulate the U.S. economy and reduce unemployment, it would

• A. cause interest rates to decrease because low interest rates encourage businessgrowth and expansion
• B. cause interest rates to rise because high interest rates encourage business growthand expansion
• C. increase the discount rate it charges banks, which would increase the money supply
• D. increase consumer spending by reducing the money supply

Why did the U.S. government initiate a policy of more frequent intervention during the Great Depression? 

•  to dominate global trade
• to stabilize the economy
•  to prepare for a possible war
• o strengthen local governments