Economics Test: Money/Monetary Policy

In bartering, each party involved must want exactly what the other party has to offer.

• True

• False

In the US, gold, but not silver, is an acceptable medium of exchange.

• True

• False

Currency includes coins and Federal Reserve notes.

• True

• False

Functions of money include its use as a store of value, as a medium of exchange, and its portability.

• True

• False

The nation's money supply increases when banks make loans.

• True

• False

As reserve requirements rise, the amount of money in circulation increases.

• True

• False

Federal Reserve Bank governors are elected by the people to serve 2 year terms.

• True

• False

An easy, expansive, or loose, money policy helps control inflation.

• True

• False

The Fed can slow the growth rate of the money supply by selling government bonds to banks and big investors.

• True

• False

The Federal Reserve sets reserve requirements for all of its member banks.

• True

• False