NEW
Font size
S
M
L
XL
WorksheetsFractional Reserve Banking
Total questions: 25
Worksheet time: 13mins
Name
Class
Date
1.
What is the the definition of inflation?
a)
Market prices rise together
b)
Market prices fall together
c)
Specific market sector prices rise
d)
Specific market sector prices fall
2.
Sudden changes in supply of productive resources & consumer demand causes...
a)
price changes
b)
commodity changes
c)
fiat currency
d)
supply fluctuation
3.
What do governments provide for the market?
a)
private goods & services
b)
public goods & services
4.
The Circular Flow model proves that the sectors of the economy are...
a)
independent
b)
dependent
c)
interdependent
d)
round
5.
Anything traded broadly for goods & services in an economy.
a)
Medium of exchange
b)
Purchasing power
c)
Bartering
d)
Commodity
6.
An item that has value in and of itself.
a)
commodity
b)
fiat
c)
barter
d)
representative money
7.
Which is an example of a common form of commodity money?
a)
water
b)
silver
c)
chicken
d)
corn
8.
Representative money is redeemable for a certain amount of a...
a)
scarce good
b)
inflation
c)
fiat
d)
commodity
9.
The value of fiat currency comes from acceptance as money, usually by declaration of legality from government.
a)
True
b)
False
10.
T/F: Fiat currency has no value in and of itself.
a)
True
b)
False
11.
Inflation & deflation (aka recession) affects the ____________ of an economy's currency.
a)
commodity
b)
medium of exchange
c)
purchasing power
d)
portability
12.
Short-run inflation is usually caused by...
a)
changes in supply of productive resources
b)
changes in demand for productive resources
13.
T/F: Increasing the money supply through the money multiplier increases the purchasing power of the dollar.
a)
True
b)
False
14.
The main job of the Federal Reserve is maintain...
a)
price stability
b)
promote inflation
c)
promote recession
d)
reserve federal spending
15.
How do banks attract savers?
a)
pay saver interest
b)
pay borrower interest
c)
loan to the saver with no interest
d)
loan to borrow with no interest
16.
What causes long-run inflation?
a)
Supply of $ > # of available goods & services
b)
Supply of $ < # of available goods & services
c)
Supply of $ = # of available goods & services
d)
All of the Above
17.
Which of the following is the minimum reserve requirement for banks?
a)
1%
b)
5%
c)
10%
d)
33%
18.
T/F: Fractional reserve banking requires the money mulitplier.
a)
True
b)
False
19.
Businesses & households provide government with...
a)
taxes
b)
sales
c)
private goods & services
d)
interest
20.
In terms of resources, what do households provide for businesses?
a)
loans
b)
savings
c)
productive resources
d)
private goods
21.
In terms of resources, what do businesses provide for households?
a)
income
b)
sales
c)
taxes
d)
private goods
22.
In terms of products, what do households provide for businesses?
a)
sales
b)
taxes
c)
private goods
d)
savings
23.
What do banks provide for households & businesses?
a)
loans
b)
savings
c)
sales
d)
public services
24.
The more banks hold in reserve the _______ the money multiplier.
a)
higher
b)
lower
25.
The money multiplier only works if ______ is deposited into the bank.
a)
taxes
b)
checks
c)
cash
d)
reserves
Reset
