27 Monetary System

Barter

• is more efficient than money.

• makes trading easier than money.

• allows greater specialization than money.

• None of the above is correct.

Which of the following best illustrates the unit of account function of money?

• You list prices for candy sold on your Web site, sweet-treats.com, in dollars.

• You pay for tickets to a WNBA game with dollars.

• You keep $10 in your backpack for emergencies.

• None of the above is correct.

U.S. currency is currently

• commodity money with no intrinsic value.

• fiat money with no intrinsic value.

• commodity money with intrinsic value.

• fiat money with intrinsic value.

Since the U.S. government has decreed that U.S. currency is legal tender,

• people may not legally make trades with anything else.

• people are more likely to accept the dollar as a medium of exchange.

• the government must hold enough gold to redeem all currency.

• All of the above are correct.

M1 includes

• savings deposits.

• money market deposit accounts.

• currency.

• All of the above are correct.

Credit cards are

• a method of deferring payment.

• used as a medium of exchange.

• part of the M2 money supply.

• equivalent to debit cards.

Which of the following might explain why the United States has so much currency per person?

• Currency may be a preferable store of wealth for criminals.

• U.S. citizens are holding a lot of foreign currency.

• People use credit and debit cards more frequently.

• All of the above help explain the abundance of currency.

Which Federal Reserve Bank president is always a voting member of the FOMC?

• Boston

• New York

• Chicago

• All of the above are correct.

The Federal Open-market Committee is made up of

• 5 of the 12 presidents of the Federal Reserve Regional banks, and the 7 members of the Board of Governors.

• the 12 presidents of the Federal Reserve Regional banks, and the Chair of the Board of Governors.

• the 12 presidents of the Federal Reserve Regional banks, and the 7 members of the Board of Governors.

• 7 of the 12 presidents of the Federal Reserve Regional banks, and the 5 members of the Board of Governors.

The Fed can influence unemployment in

• the short run, but not the long run.

• the short and long run.

• the long run, but not the short run.

• neither the short nor long run.