MCB chapter 3,4

 Currency includes

• paper money and coins.

• paper money, coins, and checks.

• paper money and checks.

• paper money, coins, checks, and savings deposits.

 The total collection of pieces of property that serve to store value is a person's

• wealth.

• income.

• money.

• credit.

Of money's three functions, the one that distinguishes money from other assets is its function as a

• store of value.

• unit of account.

• standard of deferred payment.

• medium of exchange.

All of the following are necessary criteria for a commodity to function as money EXCEPT

• it must deteriorate quickly.

• it must be divisible.

• it must be easy to carry.

• it must be widely accepted.

________ is the relative ease and speed with which an asset can be converted into a medium of exchange.

• Efficiency

• Liquidity

• Deflation

• Specialization

Which of the following is NOT included in the M1 measure of money but is included in the M2 measure of money?

•  currency

• traveler's checks

• demand deposits

• small-denomination time deposits

Which of the following is NOT included in the monetary aggregate M2?

• currency

• savings bonds

• traveler's checks

• checking deposits

If an individual redeems a U.S. savings bond for currency

• M1 stays the same and M2 decreases.

•  M1 increases and M2 increases.

• M1 increases and M2 stays the same.

• M1 stays the same and M2 stays the same.

If an individual uses money from a demand deposit account to purchase a U.S. savings bond

• M1 decreases and M2 stays the same.

• M1 stays the same and M2 increases.

• M1 stays the same and M2 stays the same.

• M1 decreases and M2 decreases.

If an individual moves money from a small-denomination time deposit to a demand deposit account

• M1 increases and M2 stays the same.

• M1 stays the same and M2 increases.

• M1 stays the same and M2 stays the same.

• M1 increases and M2 decreases.