Chapter 5 - Quick Quiz

Which of the following is NOT a primary function of money?

• Medium of exchange
• Unit of account
• Source of entertainment
• Store of value

Which of the following best describes the function of money as a unit of account?

• It is used to store wealth over time.
• It represents a physical commodity like gold.
• It allows for the comparison of the value of different items.
• It facilitates the exchange of goods and services.

What characteristic of money ensures that it can be easily carried and used in transactions?

• Divisible
• Uniform
• Portable
• Durable

What does the term 'divisible' mean in relation to money?

• Money can be easily transported.
• Money can be broken down into smaller units.
• Money must be uniform.
• Money must be durable.

What does the term 'limited supply' refer to in the context of money?

• Money should be printed frequently.
• Money should be scarce to maintain its value.
• Money should be available in unlimited quantities.
• Money should be easily accessible.

Which type of money is backed by a physical item of value, such as gold or silver?

• Fiat money
• Representative money
• Commodity money
• Digital currency

Which of the following best defines fiat money?

• Money that is only used in digital transactions
• Money backed by a physical commodity
• Money established by government regulation
• Money that has intrinsic value

Which of the following statements accurately describes the Federal Reserve System?

• It is responsible for managing the national debt.
• It was created to regulate the stock market exclusively.
• It serves as the central banking system of the United States.
• It was established to issue physical currency only.

What is the role of the Federal Reserve Board?

• To issue currency
• To oversee the Federal Reserve Banks
• To manage the national debt
• To regulate the stock market

What is the primary role of the Federal Deposit Insurance Corporation (FDIC)?

• To protect depositors' funds in case of bank failures
• To regulate interest rates
• To manage the national currency
• To issue government bonds