wayground logo

Free Printable Worksheets

Font size

S
M
L
XL
Worksheets

AP Econ Money and Banking

Total questions: 27

Worksheet time: 19mins

Name
Class
Date
1.
The fact that money must withstand the wear and tear that comes from being used over and over again is a measure of its
a)
Portability
b)
Currency
c)
Durability
d)
Age
2.
Money that can be easily divided into smaller units of value has the characteristic of
a)
Divisibility
b)
Denominations
c)
Exchange
d)
Durability
3.

If Takeoff withdraws a $100 bill from his checking account and Quavo deposits another $100 bill in his savings account, by how much will M1 and M2 change?

a)

M1 will increase, and M2 will increase.

b)

Both M1 and M2 will remain the same.

c)

M1 will decrease, but M2 will remain the same.

d)

M2 will decrease by $100.

e)

M1 will remain the same, and M2 will increase.

4.
Which of the following is an example of money as a unit of account?
a)
Purchasing a toy for $8.99
b)
Lending a friend $25.00
c)
Opening a savings account at a bank
d)
Checking the price of a camera at several stores before buying it at the lowest price
5.
The coins and paper bills used as money in a society
a)
Prices
b)
Currency
c)
Bond
d)
Checks
6.
An institution for receiving, keeping and lending money
a)
Bank
b)
Bond
c)
Stock
d)
Company
7.
What is the price paid for the use of borrowed money?
a)
Principal
b)
Interest
c)
Default
d)
FDIC
8.

When money is used to acquire goods and services, it is functioning as a

a)

Medium of exchange.

b)

Store of value.

c)

Standard of account.

d)

Equation of value.

9.

Bradley digs out $50 from his cookie jar and deposits it in his checking account. The immediate result of this transaction is that M1 has

a)

Increased by $50.

b)

Increased by more than $50.

c)

Increased by less than $50.

d)

Not changed.

10.

1/required reserve ratio determines the

a)

required reserves

b)

excess reserves

c)

lending capacity

d)

money multiplier

11.
Our current money is _______ money. Meaning that it has value because the government has ordered that it is an acceptable means to pay debts.
a)
Commodity
b)
Fiat
c)
Representative
d)
Funny
12.

Suppose the required reserve ratio is 20% and there is no currency drain. Then a $100 increase in the monetary base results in the banking system increasing the quantity of money by

a)

$80.

b)

$400.

c)

$1,000.

d)

$500.

e)

$100.

13.
Money creation by the banking system will decrease if
a)
the velocity of money increases
b)
real interest rates are increase
c)
unemployment is low
d)
people keep cash in their mattresses
14.
Which of the following statements describes a function of money?
I. Money is a medium of exchange.
II. Money is a store of value.
III. Money is a unit of account.
IV. Money is a factor of production.
a)
I and IV only.
b)
I, II and IV only.
c)
II, III and IV only.
d)
I, III, and IV only.
15.

The required reserve ratio is 20% and banks have no excess reserves. Fergie deposits $10,000 in her bank. What is the maximum amount Fergie's bank can now loan?

a)

$9,800

b)

$10,000

c)

$9,000

d)

$8,000

e)

$2,000

16.
The federal funds rate is the rate:
a)
a private borrower would pay a bank for a loan.
b)
one bank would pay another bank for a loan.
c)
a bank would pay the Federal Reserve for a loan.
d)
the Federal Reserve would pay to borrow money from government.
17.

If Timberlake Bank has a required reserve ration of 10%, loans of $15,000 deposits of $100,000, vault cash of $15,000, and reserves at the Fed of $70,000, then the bank

a)

does not have enough reserves to meet its requirement.

b)

has excess reserves of $75,000.

c)

has excess reserves of $85,000.

d)

has no remaining capacity to make loans.

e)

has excess reserves of $60,000.

18.
A reserve ratio is the:
a)
proportion of cash and security reserves the bank needs to hold.
b)
fraction of deposits that the bank is required to hold.
c)
loan to deposit ratio in the bank's balance sheet.
d)
money belonging to the bank's largest depositors.
19.
If on receiving a $300 deposit, the banks excess reserves increase by $255, the current reserve requirement must be:
a)
15%
b)
10%
c)
5%
d)
12%
20.
Which of the following would be the initial effect of an individual making a $10,000 cash deposit in a bank?
a)
The money supply would rise by $10,000.
b)
The money supply would fall by $10,000.
c)
The money supply would not be affected by the deposit.
d)
The money supply would fall, but by less than the $10,000 deposit.
21.

If Beyonce' deposits $3,000 in currency into her savings account at Bank of America,

a)

M1 does not change.

b)

M1 decreases.

c)

M2 decreases.

d)

M2 increases.

e)

M1 and M2 both increase.

22.
What is the multiplier if the reserve requirement is 25%?
a)
4
b)
5
c)
40
d)
.4
23.

Which of the following financial institutions does NOT have to meet minimum reserve ratios?

i. the Fed

ii. commercial banks

iii. credit unions

a)

iii only

b)

i, ii, and iii

c)

i only

d)

ii and iii

e)

ii only

24.
Assume that the reserve requirement is 20 percent, but banks voluntarily keep some excess reserves.  A $1 million increase in new reserves will result in
a)
an increase in the money supply of $5 million
b)
an increase in the money supply of less than $5 million
c)
a decrease in the money supply of $5 million
d)
a decrease in the money supply of more than $5 million
25.
Penny is an artist, and John is a carpenter. Penny agrees to paint a portrait of John’s family in exchange for a handmade table created by John. How do Penny and John pay for their goods in their transaction? 
a)
using a store of value
b)
through credit
c)
through bartering
d)
with currency
26.

Checks are not money because they

a)

can bounce when there are not enough funds to cash them.

b)

are just instruments to transfer money between banks.

c)

are not always accepted when trying to purchase goods or services.

d)

are not issued by the government.

e)

are not guaranteed by banks.

27.

Credit cards are:

i. a generally accepted form of payment and therefore part of M1.

ii. are included in M1 because you write a check to pay your monthly bill.

iii. a means of borrowing money.

a)

i only

b)

i and iii

c)

ii only

d)

i and ii

e)

iii only

Similar Resources on Wayground

Sociology Unit 1 Vocab

22 questions

Sociology Unit 1 Vocab

quiz

Worksheet

•

11th Grade

Study of Culture, Society and Politics

25 questions

Study of Culture, Society and Politics

quiz

Worksheet

•

12th Grade

Country Emblems

22 questions

Country Emblems

quiz

Worksheet

•

11th Grade

The Making of a Global World Part 1

22 questions

The Making of a Global World Part 1

quiz

Worksheet

•

10th Grade - Professi...

The Age of Industrialisation Part 3

22 questions

The Age of Industrialisation Part 3

quiz

Worksheet

•

10th Grade - Professi...

Congress Test Review/Retake

27 questions

Congress Test Review/Retake

quiz

Worksheet

•

12th Grade

finance

22 questions

finance

quiz

Worksheet

•

10th Grade - University

Social 9: Ch6: Economic systems

23 questions

Social 9: Ch6: Economic systems

quiz

Worksheet

•

9th - 12th Grade