Monetary Policy Quiz

True or False: Despite the rise of the internet and e-commerce, the majority of US currency is still transferred via paper notes - physical money exchanged by hand. 

• True

• False

Acceptable

• It must last

• Break into smaller parts

• Be able to carry around

• People must be willing to take it in a trade.

Portable

• Recognizeable and Measurable

• Be able to carry around

• Break into smaller parts

• It must last

Uniform

• It must last

• Retains value over time, supply is controlled

• Recognizeable and Measurable

• Break into smaller parts

Divisible

• Break into smaller parts

• it must last

• Recognizeable and Measurable

• Be able to carry it around

Durable

• Retains value over time, supply is controlled

• it must last

• Be able to carry around

• Break into smaller parts

Limited Supply/Stable

• Retains value over time, supply is controlled

• Recognizable

• it must last

• portable

Who makes all the decisions in the Federal Reserve?

• Open Market Committee

• The 12 Federal Reserve Banks

• The Federal Advisory Council

• The Board of Governors

What is the main purpose of the FDIC?

• To make sure that the government has enough gold to cover its expenses

• To make sure that banks charge a fair amount of interest on loans

• To make sure that customers do not lose money if a bank fails

• To make sure banks do not fail

Our currency, the US Dollar is currently what type of money?

• Representative Money

• Commodity-Backed Money

• Fiat Money

• Commodity Money