Unit 4.17 Assessment Review

Which describes the type of exchange that does not use money?

• financing

• borrowing

• bartering

• purchasing

Which most accurately explains why fiat money differs from commodity money?

• Fiat money an also be used as a productive input.

• Fiat money only has value as a medium of exchange.

• Fiat money has value because it is a precious metal such as gold.

• Fiat money has value because it enables the barter system to work.

Which is the purpose of the Federal Reserve Bank?

• protect bank depositors against losing their money

• manage the growth of the U.S. economy

• prevent stock market fraud

• issue government bonds

Which is the purpose of the Securities and Exchange Commission (SEC)?

• issues government bonds

• manage the growth of the U.S. economy

• protect bank depositors against losing their money

• prevent stock market fraud

How can a government best redistribute wealth?

• by enacting a progressive tax system

• through the use of tariffs and duties

Which describes the most likely effect of the Fed lowering the discount rate on overnight loans?

• a reduction in the inflation rate

• an increase in the money supply

What purpose do price ceilings serve?

• they protect the poor

• increase production

• Create a surplus of goods

• they enable rationing

Price ceiling is the maximum price the government allows seller to charge.

• True

• False

The Supreme law that governs the United States is

• the Constitution

• House of Representatives

• Senate

Counterfeiting is legal. (True or False)

• True

• False