Which of the following statements about M1 Assests is true?

• M1 assets cannot be converted easily into cash
• M1 assets are stored in savings accounts.
  
• M1 assets can be converted into cash easily.
• M1 assets do not have liquidity.

What is a family most likely to do if they want to purchase a home?

• use a credit card
• get a mortgage
• open a checking account
• purchase a certificate of deposit

Which type of financial institution plays the largest role in the economy?

• credit unions
• savings banks
• savings and loan associations
• commercial banks

Which would somebody use to withdraw money from a checking account?

• stored-value card
• debit card
• credit card
• gift card

What kinds of money are included in M1?

• Money market funds
• currency
• savings deposits
• small-time deposits

In which of the following is a positive aspect of using a credit card?

• the interest charged on credit cards is lower on all other types of loans
• with a credit card, money is automatically deducted from the user's bank account
• using a credit card allows consumers to buy goods even if they don't have cash
• credit card bills can quickly add up if the conusmer only pays the minimum

What service is available through home banking on the internet?

• checking account balances
• withdrawing cash
• lending money to a friend
• selling gold

Which is not an example of a stored-value card?

• gift card
• credit card
• phone card
• Subway smart card

One benefit of our free enterprise systtem is that it

• allows the government to decide what goods and services will be produced
• provides people with opportunities to invest their savings for their most productive use
• restricts individual wealth
• benefits businesses and not individuals

Interest helps allocate savings to its most productive use by

• limiting risk
• directing households to save or invest
• transferring money from borrowers to savers
• providing money for business improvements