ACC5044-Week 1

Which country was the first in Europe to use paper money?

• France

• Sweden

• Germany

• England

What is the focal point of the international monetary system?

• The gold reserve of each country

• The exchange rate mechanism

• The GDP of each country

• The level of technological advancement in banking

After the Templars, who contributed to the development of the banking system in Europe?

• German economists

• Greek philosophers

• Wealthy families in northern Italy

• Spanish explorers

Who laid the foundation of the modern banking system?

• Italian families

• The Templars

• The Bank of England

• Chinese merchants

A disadvantage of the gold standard was:

• It facilitated rapid economic growth

• It limited the ability of governments to use monetary policies against economic troubles

• It hindered the international monetary system

• It limited the functions of fixed exchange rate system

Which is NOT a type of exchange rate mechanism?

• Fixed-exchange rate system

• Floating exchange rate

• Managed exchange rate

• Voluntary exchange rate

Which of the following was used as a unit of value in primitive trading systems?

• Paper notes

• Cowrie shells

• Gold coins

• Credit cards

Precious metals were preferred as a means of exchange due to :

• Beauty and artistic value

• Superior saleableness/acceptability

• Perishable

• Lack of durability

Which of the following was a significant problem with the barter system?

• High transaction costs

• Difficulty in finding two parties with mutual needs

• High inflation rates

• Government regulation

What does the term "barter" mean?

• The use of money for transactions

• The act of trading goods or services for money

• The act of trading goods or services for other goods or services

• The invention of currency