Economic Concepts Quiz

Anything that is used to determine value during the exchange of goods and services?

• median of exchange

• Barter

• Service

• Commodity

The money an investor receives above and beyond the money initially invested is called

• return

• Interest

• Revenue

• Dividend

Type of money that the government has decreed as an acceptable means to pay debts?

• Commodity Money

• Fiat Money

• Cryptocurrency

• Barter System

What is commodity money?

• Money that has intrinsic value

• Digital currency

• Fiat money

• Cryptocurrency

A bond is a

• financial instrument representing a loan made by an investor to a borrower

• type of stock representing ownership in a company

• form of currency used in international trade

• digital asset used in blockchain technology

A share of stock represents

• ownership in a company

• a loan to a company

• a company's debt

• a company's profit

What would happen if the Federal Reserve reduced the reserve requirement?

• Banks would have more money to lend.

• Interest rates would increase.

• Inflation would decrease.

• The money supply would contract.

What would happen if the Federal Reserve increased the discount rate?

• Inflation would increase.

• Banks would borrow more from the Federal Reserve.

• Interest rates would rise.

• The money supply would increase.

What is the most important monetary tool the Federal Reserve uses?

• Open Market Operations

• Discount Rate

• Reserve Requirements

• Interest on Reserves

Why are funds in checking accounts called demand deposits?

• Because they can be withdrawn at any time without prior notice

• Because they require a demand draft for withdrawal

• Because they are deposited on demand by the bank

• Because they are only available on demand during banking hours