Semester 2 Unit 2.20 Assessment Review

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

• financing

• bartering

• borrowing

• purchasing

Which terms refers to the use of money?

• barter

• capitalist

• socialist

• financial

Which statement accurately describes the relationship between commodity money and fiat money?

• Both commodity money and fiat money require a free-market system.

• Commodity money has value in itself while fiat money has value only because it is given value.

Which is the purpose of requiring banks to keep a specific percentage of their deposits on hand in the vault?

• to prevent growth of the money supply from stagnating

• to ensure that banks have enough money to loan to potential customers

• to make sure customers' demands for withdrawals can be met instantly

• to enable the government to calculate the bank's tax burden more easily

Which is the purpose of the Federal Reserve Bank?

• issue government bonds

• prevent stock market fraud

• manage the growth of the U.S. economy

• protect bank depositors against losing their money

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

• 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 U.S. Treasury department?

• protect bank depositors against losing their money

• manage the growth of the U.S. economy

• prevent stock market fraud

• issue government bonds

Which can the Fed accomplish by raising or lowering the required reserve ratio?

• prevent a budget deficit

• reduce housing prices

• increase or decrease the money supply

• ensure an equitable distribution of wealth

Which describes the most likely effect of the sale of a new batch of Treasury bonds?

• an increase in unemployment

• a reduction in the inflation rte

• an increase in the money supply

• a decrease in the money supply

Which describes someone's expected outcome from investing in the stock market?

• making profit from savings

• raising his or her wage level