Macro Unit IV: Financial Sector (Hybrid)

Assume a country uses more credit cards for payment. The demand for money will shift to the _____ and the interest rate will _____.

• right; increase

• left; increase

• right; decrease

• left; decrease

• right; be indeterminate

An increase in Inflation will cause a(n):

• increase in the demand for money

• decrease in the demand for money

• upward movement along the demand for money curve

• increase in the supply of money

• downward movement along the demand for money curve

When the interest rate is high, the quantity demanded of money will be:

• high because you can earn more with the cash in your pocket

• low because you can earn income on interest bearing assets

• high because the central bank sets the interest rate

• low because the central bank dissolved the reserve requirement

• All of the answers

Which of the following would be the most liquid asset?

• Checking account

• House

• Car

• Savings account

• Mutual fund

The supply for money is set by the:

• central bank

• consumers

• businesses

• tax rate

• spending multiplier

This term refers to the ease with which you can convert an asset to cash with little or no loss of purchasing power.

• legal tender

• acceptability

• liquidity

• uniformity

• none of the answers

The M1 measure of the money supply includes:

• cash + checking deposits

• cash + saving deposits

• checking deposits + saving deposits

• stocks + bonds

• checking deposits + bonds

What function of money does the picture represent?

• Medium of Exchange

• Store of Value

• Unit of Account

• Acceptable

• Liquidity

What function of money does the picture represents?

• Medium of Exchange

• Store of Value

• Unit of Account

• Durable

• Non-durable

You've been saving that money in a shoe box under your bed for a year. What is the primary function of money exhibited here?

• Medium of Exchange

• Store of Value

• Unit of Account

• Stable

• Durable