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Quiz 2
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1
If the price index rises from 100 to 125, the value of the dollar will:
A)fall by 25%
B)fall by 20%
C)rise by 25%
D)neither rise nor fall
2
Which of the following is not a routine function of the Federal Reserve Banks?
A)Issuing currency
B)Providing for check collection
C)Regulating the supply of money
D)Collecting tax revenue
3
The purchasing power of the dollar:
A)increases with the rate of inflation
B)is inversely related to the price level
C)is directly related to the supply of money
D)is directly related to the price level
4
Which of the following is included in M2 but not M1?
A)Currency held by banks
B)Small time deposits (less than $100,000)
C)Credit card balances
D)Large time deposits (at least $100,000)
5
In the U.S., there are:
A)50 Federal Reserve Districts corresponding to the 50 states
B)7 Federal Reserve Districts corresponding to the 7 members of the Board of Governors
C)12 Federal Reserve Districts corresponding to the 12 Federal Reserve Banks
D)6 Federal Reserve Banks corresponding to the number of U.S. time zones
6
M2 includes:
A)money market accounts but not currency
B)both small (less than $100,000) and large ($100,000 or more) time deposits
C)both checkable deposits and savings deposits
D)currency but not money market accounts
7
The "store of value" function of money gives rise to:
A)a transactions demand for money
B)an asset demand for money
C)an interest demand for money
D)stable supply of money
8
Which of the following is not a function of the Federal Reserve?
A)Lending money to the general public
B)Lending money to banks and thrifts
C)Issuing currency
D)Supervising banks
9
Writing a check to purchase a new computer is an example of using money primarily as a:
A)unit of account
B)standard of value
C)medium of exchange
D)store of value
10
Which of the following is a true statement?
A)In 2005, the share of financial assets held by banks and thrifts was approximately half its 1980 value
B)The 10 largest U.S. banks hold almost 90% of U.S. financial assets
C)The share of financial assets held by banks and thrifts has approximately doubled since 1980
D)The rate of bank consolidations has slowed dramatically over the last 20 years





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