Practice Quiz #3 (Chapters 5, 7 & 14)

Which of the following is not included in either M-1 or M-2?

• Certificates of deposit

• Time deposits

• Savings accounts

• Credit cards

• Chequing accounts

Which of the following best describes the durability characteristic of money?

• Units of money can be matched with the value of goods.

• Units of money do not expire after a certain time limit.

• Units of money of different nations are easily converted to other units of money.

• Units of money allow people to measure the relative value of goods and services.

• Units of money have lasting value.

Which of the following is not part of the M-1 supply?

• Currency at hand

• Currency amount of written cheques

• Currency available through a debit card

• Currency in chequing accounts

• Currency value of time deposits

Foreign banks are not allowed to do business in Canada.

• True

• False

Which of the following best describes the stability characteristic of money?

• Units of money can be matched with the value of goods.

• Units of money of different nations are easily converted to other units of money.

• Units of money have relatively constant value.

• Units of money do not expire after a certain time limit.

• Units of money allow people to measure the relative value of goods and services.

The value of the Canadian dollar

• reflects the overall supply and demand for Canadian dollars both at home and abroad.

• is always valued at the same exchange rate.

• typically trades above the U.S. dollar.

• typically values at par with the U.S. dollar.

• none of these.

Which of the following best describes the durability characteristic of money?

• Units of money do not expire after a certain time limit

• Units of money can be matched with the value of goods

• Units of money allow people to measure the relative value of goods and services

• Units of money of different nations are easily converted to other units of money

• Units of money have lasting value.

When does the value of money increase?

• When money is durable

• When the money supply increases

• When the money supply is low

• When the supply of money is stable

• When money serves as a store of value

All of the following are criteria for something to be considered as money except

• durability

• divisibility

• portability

• value

• stability

Which of the following best describes the portability characteristic of money?

• It neither dies nor spoils, and if it wears out, it can be replaced

• Units of money can be matched with the value of goods

• It can be exchanged across national borders

• It allows people to measure the relative value of goods and services

• It is light and easy to handle