15. Money and Banking Quiz

What is money?

• A) A commodity like gold or silver

• B) Anything that is generally accepted as payment for goods and services

• C) Only paper notes and coins

• D) A type of financial investment

Which characteristic is NOT a requirement for something to serve as money?

• A) Scarcity

• B) Durability

• C) Divisibility

• D) Unlimited supply

Which of the following is a function of money?

• A) Medium of exchange

• B) Standard of deferred payments

• C) Barter facilitator

• D) Both A and B

The U.S. money supply includes:

• A) Only paper money and coins

• B) Demand deposits and time deposits

• C) Stocks and bonds

• D) Gold reserves only

What primary tool does the Federal Reserve use to manage the money supply?

• A) Regulation of interest rates

• B) Open market operations

• C) Setting government budgets

• D) Direct taxation

What type of financial institution is NOT a depository institution?

• A) Commercial bank

• B) Credit union

• C) Insurance company

• D) Savings and loan association

Which agency insures deposits in commercial banks and thrift institutions in the United States?

• A) U.S. Treasury

• B) The Federal Reserve

• C) The Federal Deposit Insurance Corporation (FDIC)

• D) The National Credit Union Administration

Which of the following is NOT considered a store of value?

• A) Currency

• B) Stocks

• C) Real estate

• D) Consumer goods

What does liquidity refer to in the context of money?

• A) The ease with which it can be exchanged for other currencies

• B) The ease with which it can be used to pay for goods and services

• C) The ease with which it can be converted into precious metals

• D) The ease with which it can be saved and stored for future use

Which of the following best describes 'fiat money'?

• A) Money backed by a physical commodity

• B) Money that has intrinsic value

• C) Money declared by a government to be legal tender

• D) Money used only in international trade