Economics Chapter 10-11 Review

Anything that society generally accepts as payment is called ____?

• money

• fiscal policy

• monetary policy

• barter

The exchange of goods/services for other goods/services is called ____?

• money

• fiscal policy

• monetary policy

• barter

Purchasing Power is ____?

• the ability to buy goods/services

• the value of a currency

• the strength of a nation's economy

• value that only applies to full-bodied coins

A type of currency that uses a single good as money is called ____?

• commodity money

• fiat money

• representative money

A type of currency that represents a commodity in storage is called ____?

• commodity money

• fiat money

• representative money

A type of currency that is not backed by any commodity but is worth something only because the gov't says so is called ___?

• commodity money

• fiat money

• representative money

What two things must be true to keep fiat money valuable?

• Faith the others will accept it

• Limited quantity of money supply

• Used by other countries

• Be easy to transport

• Be easily divisible

Which of these is NOT a desirable characteristic of money?

• Portability

• Divisibility

• Low liquidity

• Durability

• Stability

The German Weimar Republic of the 1930's illustrates what economic concept?

• High inflation led to worthless fiat money

• High liquidity led to over-supply of commodity money

• Poor monetary policy led to high deflation

• The economy was ruined by minting too many token coins

What is a "full-bodied" coin?

• The face value of the coin is the same as its content value

• The content and face value are not equal

• The coin is fiat

• The coin is worth more than its face value