Quiz about vixmoo p3

Question 1

You use VND currency to pay the owner of a restaurant for a delicious meal. The currency

Accepted Answer

has no intrinsic value. The exchange is not an example of barter.

Answer

has no intrinsic value. The exchange is an example of barter.

Answer

has intrinsic value. The exchange is not an example of barter.

Answer

has intrinsic value. The exchange is not an example of barter.

Question 2

A double coincidence of wants

Accepted Answer

All of the above are correct.

Answer

is required when there is no item in an economy that is widely accepted in exchange for goods and services.

Answer

is required in an economy that relies on barter.

Answer

is a hindrance to the allocation of resources when it is required for trade.

Question 3

Money

Accepted Answer

All of the above are correct.

Answer

is more efficient than barter.

Answer

makes trades easier

Answer

allows greater specialization.

Question 4

Which of the following is a function of money?

Accepted Answer

All of the above are correct.

Answer

a unit of account

Answer

a store of value

Answer

medium of exchange

Question 5

Which of the following best illustrates the medium of exchange function of money?

Accepted Answer

You pay for your oil change using currency.

Answer

You keep some money hidden in your shoe.

Answer

You keep track of the value of your assets in terms of currency.

Answer

None of the above is correct.

Question 6

Any item that people can use to transfer purchasing power from the present to the future is called

Accepted Answer

a store of value.

Answer

a medium of exchange.

Answer

a unit of account.

Answer

None of the above is correct.

Question 7

Which of the following is a store of value?

Accepted Answer

cash and stocks

Answer

cash but not stocks

Answer

stocks but not cash

Answer

neither cash nor stocks

Question 8

Which of the following is a store of value?

Accepted Answer

All of the above are correct.

Answer

currency

Answer

U.S. government bonds

Answer

fine art

Question 9

Liquidity refers to

Accepted Answer

the ease with which an asset is converted to the medium of exchange.

Answer

the measurement of the intrinsic value of commodity money.

Answer

the measurment of the durability of a good.

Answer

how many time a dollar circulates in a given year.

Question 10

Which list ranks assets from most to least liquid?

Accepted Answer

currency, stocks, fine art

Answer

currency, fine art, stocks

Answer

fine art, currency, stocks

Answer

fine art, stocks, currency

Question 11

Which list ranks assets from most to least liquid?

Accepted Answer

money, bonds, cars, houses

Answer

money, cars, houses, bonds

Answer

bonds, money, cars, houses

Answer

bonds, cars, money, houses

Question 12

Money is

Accepted Answer

the most liquid asset but an imperfect store of value.

Answer

the most liquid asset and a perfect store of value.

Answer

not the most liquid asset but a perfect store of value.

Answer

neither the most liquid asset and nor a perfect store of value

Question 13

When we measure and record economic value, we use money as the

Accepted Answer

unit of account.

Answer

liquid asset.

Answer

medium of exchange

Answer

store of value.

Question 14

Commodity money is

Accepted Answer

money with intrinsic value.

Answer

backed by gold.

Answer

the principal type of money in use today.

Answer

receipts created in international trade that are used as a medium of exchange.

Question 15

Fiat money

Accepted Answer

has no intrinsic value

Answer

is backed by gold.

Answer

is a medium of exchange but not a unit of account.

Answer

is any close substitute for currency such as checkable deposits.

Question 16

Currently, VND is

Accepted Answer

fiat money with no intrinsic value

Answer

fiat money with intrinsic value.

Answer

commodity money with intrinsic value.

Answer

commodity money with no intrinsic value.

Question 17

The primary difference between commodity money and fiat money is that

Accepted Answer

commodity money has intrinsic value but fiat money does not.

Answer

commodity money is a medium of exchange but fiat money is not.

Answer

fiat money is a medium of exchange but commodity money is not.

Answer

fiat money has intrinsic value but commodity money does not

Question 18

Currency includes

Accepted Answer

paper bills and coins.

Answer

demand deposits.

Answer

credit cards.

Answer

Both (a) and (b) are correct.

Question 19

People can write checks against

Accepted Answer

demand deposits and money market mutual funds

Answer

demand deposits but not money market mutual funds

Answer

money market mutual funds but not demand deposits

Answer

neither demand deposits nor money market mutual funds

Question 20

Demand deposits are a type of

Accepted Answer

checking account.

Answer

time deposit.

Answer

money market mutual fund.

Answer

savings deposit.

Question 21

The measure of the money stock called M1 includes

Accepted Answer

wealth held by people in their checking accounts.

Answer

wealth held by people in their savings accounts.

Answer

wealth held by people in money market mutual funds.

Answer

everything that is included in M2 plus some additional items.

Question 22

M1 equals currency plus demand deposits plus

Accepted Answer

traveler's checks plus other checkable deposits.

Answer

nothing else.

Answer

other checkable deposits.

Answer

traveler's checks plus other checkable deposits plus savings deposits.

Question 23

Which of the following is not included in M1?

Accepted Answer

$500 in your savings account

Answer

a $5 bill in your wallet

Answer

$100 in your checking account

Answer

All of the above are included in M1.

Question 24

Which of the following items is included in M2?

Accepted Answer

money market mutual funds

Answer

credit cards

Answer

corporate bonds

Answer

large time deposits

Question 25

Which of the following statements is correct?

Accepted Answer

All items that are included in M1 are included also in M2.

Answer

All items that are included in M2 are included also in M1.

Answer

Credit cards are included in both M1 and M2.

Answer

Savings deposits are included in both M1 and M2.

Question 26

Which of the following is not included in either M1 or M2?

Accepted Answer

U.S. Treasury bills

Answer

small time deposits

Answer

demand deposits

Answer

money market mutual funds

Question 27

Which of the following institutions is a central bank?

Accepted Answer

All of the above are correct.

Answer

the Bank of Japan

Answer

the Bank of England

Answer

the Federal Reserve System

Question 28

The agency responsible for regulating the money supply in Vietnam is

Accepted Answer

the State Bank of Vietnam.

Answer

the Comptroller of the Currency.

Answer

the Ministry of Finance.

Answer

the GSO.

Question 29

Which of the following does a central bank not do?

Accepted Answer

convert VND into gold

Answer

conduct monetary policy

Answer

act as a lender of last resort

Answer

serve as a bank regulator

Question 30

Which of the following does a central bank not do?

Accepted Answer

It makes loans to any qualified business that requests one.

Answer

It controls the supply of money.

Answer

It acts as a lender of last resort to banks.

Answer

It tries to ensure the health of the banking system.

Question 31

When conducting an open-market sale, central bank

Accepted Answer

sells government bonds, and in so doing decreases the money supply.

Answer

buys government bonds, and in so doing increases the money supply.

Answer

buys government bonds, and in so doing decreases the money supply.

Answer

sells government bonds, and in so doing increases the money supply.

Question 32

When conducting an open-market purchase, central bank

Accepted Answer

buys government bonds, and in so doing increases the money supply.

Answer

buys government bonds, and in so doing decreases the money supply.

Answer

sells government bonds, and in so doing increases the money supply.

Answer

sells government bonds, and in so doing decreases the money supply.

Question 33

An open-market purchase

Accepted Answer

increases the number of dollars in the hands of the public and decreases the number of bonds in the hands of the public

Answer

increases the number of dollars and the number of bonds in the hands of the public.

Answer

decreases the number of dollars and the number of bonds in the hands of the public.

Answer

decreases the number of dollars in the hands of the public and increases the number of bonds in the hands of the public.

Question 34

In a system of 100-percent-reserve banking,

Accepted Answer

banks do not influence the supply of money.

Answer

banks do not accept deposits.

Answer

loans are the only asset item for banks.

Answer

All of the above are correct.

Question 35

In a fractional-reserve banking system, a bank

Accepted Answer

keeps only a fraction of its deposits in reserve.

Answer

does not make loans.

Answer

does not accept deposits.

Answer

None of the above is correct.

Question 36

Under a fractional-reserve banking system, banks

Accepted Answer

generally lend out a majority of the funds deposited.

Answer

hold more reserves than deposits.

Answer

cause the money supply to fall by lending out reserves.

Answer

All of the above are correct.

Question 37

On a bank's T-account, which are part of the banks assets?

Accepted Answer

reserves but not deposits made by its customers

Answer

Both deposit made by its customers and reserve

Answer

deposits made by its customers but not reserves

Answer

neither deposits made by its customers nor reserves

Question 38

A bank has a 10 percent reserve requirement, $4,000 in deposits, and has loaned out all it can given the reserve requirement.

Accepted Answer

It has $400 in reserves and $3,600 in loans.

Answer

It has $40 in reserves and $3,960 in loans

Answer

It has $444 in reserves and $3,556 in loans.

Answer

None of the above is correct.

Question 39

If a bank desires to hold no excess reserves, the reserve requirement is 5 percent, and it receives a new deposit of $1,000

Accepted Answer

All of the above are correct.

Answer

its required reserves increase by $50.

Answer

its total reserves initially increase by $1,000.

Answer

it will be able to make a new loan of up to $950.

Question 40

As the reserve ratio increases, the money multiplier

Accepted Answer

decreases.

Answer

increases.

Answer

does not change.

Answer

could do any of the above.

Question 41

In the special case of the 100 percent-reserve banking the money multiplier is

Accepted Answer

1 and banks do not create money.

Answer

1 and banks create money.

Answer

2 and banks create money

Answer

2 and banks do not create money.

Question 42

Which of the following can central bank do to change the money supply?

Accepted Answer

change reserves or change the reserve ratio

Answer

change reserves but not change the reserve ratio

Answer

change the reserve ratio but not change the reserve ratio

Answer

neither change reserves nor change the reserve ratio

Question 43

When central bank conducts open-market operations to increase the money supply, it

Accepted Answer

buys government bonds from the public.

Answer

redeems central bank notes.

Answer

raises the discount rate.

Answer

decreases its lending to member banks

Question 44

When central bank conducts open-market purchases,

Accepted Answer

it buys Treasury securities, which increases the money supply.

Answer

it buys Treasury securities, which decreases the money supply.

Answer

it borrows money from member banks, which increases the money supply.

Answer

it lends money to member banks, which decreases the money supply.

Question 45

If central bank sells government bonds to the public, then reserves

Accepted Answer

decrease and the money supply decreases

Answer

increase and the money supply increases.

Answer

increase and the money supply decreases.

Answer

decrease and the money supply increases.

Question 46

If the money multiplier is 2 and central bank wants to increase the money supply by $900,000, it could

Accepted Answer

buy $450,000 worth of bonds.

Answer

buy $300,000 worth of bonds.

Answer

sell $300,000 worth of bonds.

Answer

sell $450,000 worth of bonds.

Question 47

When central bank purchases $200 worth of government bonds from the public, money supply eventually increases by

Accepted Answer

more than $200.

Answer

exactly $200.

Answer

less than $200.

Answer

None of the above are correct.

Question 48

The discount rate is the interest rate that

Accepted Answer

Central bank charges banks for loans.

Answer

banks charge one another for loans.

Answer

banks charge central bank for loans.

Answer

Central bank charges firms for loans.

Question 49

Central bank can increase the money supply by conducting open-market

Accepted Answer

purchases or by lowering the discount rate.

Answer

sales or by raising the discount rate.

Answer

sales or by lowering the discount rate.

Answer

purchases or by raising the discount rate.

Question 50

If the money multiplier is 2 and central bank buys $50,000 worth of bonds, what happens to the money supply?

Accepted Answer

it increases by $100,000

Answer

it increases by $150,000

Answer

it decreases by $100,000

Answer

it decreases by $150,000

Question 51

Central bank can decrease the money supply by conducting open-market

Accepted Answer

sales or by raising the discount rate.

Answer

sales or by lowering the discount rate.

Answer

purchases or by raising the discount rate.

Answer

purchases or by lowering the discount rate.

Question 52

Which of the following can banks use to borrow from central bank?

Accepted Answer

the discount window or the term auction facility

Answer

the discount window but not the term auction facility

Answer

the term auction facility but not the discount window

Answer

Banks can not borrow from the Federal Reserve, only the government can.

Question 53

Reserves increase if central bank

Accepted Answer

lowers the discount rate or auctions more credit

Answer

raises the discount rate or auctions more credit.

Answer

raises the discount rate but not if it auctions more credit.

Answer

lowers the discount rate but not if it auctions more credit.

Question 54

Reserves decrease if central bank

Accepted Answer

raises the discount rate but not if it auctions more credit.

Answer

raises the discount rate or auctions more credit.

Answer

lowers the discount rate or auctions more credit.

Answer

lowers the discount rate but not if it auctions more credit.

Question 55

Which of the following both increase the money supply?

Accepted Answer

a decrease in the discount rate and a decrease in the interest rate on reserves

Answer

an increase in the discount rate and an increase in the interest rate on reserves

Answer

an increase in the discount rate and a decrease in the interest rate on reserves

Answer

a decrease in the discount rate and an increase in the interest rate on reserves

Question 56

Reserve requirements are regulations concerning

Accepted Answer

the amount of reserves banks must hold against deposits.

Answer

the amount banks are allowed to borrow from central bank.

Answer

reserves banks must hold based on the number and type of loans they make.

Answer

the interest rate at which banks can borrow from central bank.

Question 57

In a fractional-reserve banking system, an increase in reserve requirements

Accepted Answer

decreases both the money multiplier and the money supply.

Answer

increases both the money multiplier and the money supply.

Answer

increases the money multiplier, but decreases the money supply.

Answer

decreases the money multiplier, but increases the money supply.

Question 58

In a fractional-reserve banking system, a decrease in reserve requirements

Accepted Answer

increases both the money multiplier and the money supply.

Answer

decreases both the money multiplier and the money supply.

Answer

increases the money multiplier, but decreases the money supply.

Answer

decreases the money multiplier, but increases the money supply.

Question 59

Other things the same, if reserve requirements are increased, the reserve ratio

Accepted Answer

increases, the money multiplier decreases, and the money supply decreases.

Answer

increases, the money multiplier increases, and the money supply increases.

Answer

decreases, the money multiplier increases, and the money supply increases.

Answer

decreases, the money multiplier decreases, and the money supply increases.

Question 60

Other things the same if reserve requirements are decreased, the reserve ratio

Accepted Answer

decreases, the money multiplier increases, and the money supply increases.

Answer

decreases, the money multiplier increases, and the money supply decreases.

Answer

increases, the money multiplier increases, and the money supply increases.

Answer

increases, the money multiplier increases, and the money supply decreases.

Question 61

If the Fed increases the reserve ratio from 4 percent to 10 percent, then the money multiplier

Accepted Answer

decreases from 25 to 10.

Answer

decreases from 20 to 10.

Answer

increases from 10 to 25.

Answer

increases from 10 to 20.

Question 62

If the money multiplier decreased from 20 to 12.5, then

Accepted Answer

the Fed increased the reserve ratio from 5 percent to 8 percent.

Answer

the Fed increased the fed funds rate from 5 percent to 8 percent..

Answer

the Fed decreased the reserve ratio from 8 percent to 5 percent.

Answer

the Fed decreased the fed funds rate from 8 percent to 5 percent.

Question 63

The Fed increases the reserve requirement, but it wants to offset the effects on the money supply. Which of the following should it do?

Accepted Answer

buy bonds to increase reserves

Answer

sell bonds to increase reserves

Answer

sell bonds to decrease reserves

Answer

buy bonds to decrease reserves

Question 64

If the public decides to hold less currency and more deposits in banks, bank reserves

Accepted Answer

increase and the money supply eventually increases.

Answer

decrease and the money supply eventually decreases.

Answer

decrease but the money supply does not change.

Answer

increase but the money supply does not change.

vixmoo p3

98 questions

You use VND currency to pay the owner of a restaurant for a delicious meal. The currency

Which of the following is an example of barter?

A double coincidence of wants

Money

Which of the following lists is included in what economists call “money”?

Economists use the term “money” to refer to

Which of the following is a function of money?

Which of the following best illustrates the medium of exchange function of money?

Any item that people can use to transfer purchasing power from the present to the future is called

Which of the following is a store of value?

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