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| 1 | |
Whenever the Jones family receives change from a purchase, it goes into a jar to be used in the summer as spending money for the family vacation. The primary function served by the money in the jar is: |
| | A) | standard of value |
| | B) | store of value |
| | C) | unit of account |
| | D) | medium of exchange |
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| 2 | |
Enrique deposits $50 cash into his checking account at the bank. As a result, the money supply: |
| | A) | increases by $100, because the bank has his $50 cash and checkable deposits also increase by $50 |
| | B) | increases by $50 because of the increase in checkable deposits |
| | C) | does not change |
| | D) | decreases by $50 |
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| 3 | |
Use the following to answer the next question:
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Refer to the table. The size of the M2 money supply is: |
| | A) | $2,950 billion |
| | B) | $4,850 billion |
| | C) | $4, 875 billion |
| | D) | $6,275 billion |
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| 4 | |
Jorge goes online and transfers $2000 from his checking account to his savings account. As a result: |
| | A) | M1 and M2 decrease; MZM increases |
| | B) | M1 decreases; M2 and MZM increase |
| | C) | M1 decreases; M2 and MZM stay the same |
| | D) | M1 and M2 decrease; MZM stay the same |
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| 5 | |
A 50% increase in the price level: |
| | A) | decreases the value of a dollar by one third |
| | B) | decreases the value of a dollar by one half |
| | C) | decreases the value of a dollar by two thirds |
| | D) | has no impact on the value of a dollar |
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| 6 | |
The U.S. money supply is "backed" by: |
| | A) | gold |
| | B) | silver |
| | C) | a joint committee of the Federal Deposit Insurance Corporation and the National Credit Union Administration |
| | D) | the ability of the government to maintain its value |
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| 7 | |
The group within the Federal Reserve System that directs the purchase and sale of government securities is the: |
| | A) | Board of Governors |
| | B) | Federal Open Market Committee |
| | C) | 12 presidents of the Federal Reserve banks |
| | D) | Joint Economic Committee |
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| 8 | |
The Financial Services Modernization Act of 1999: |
| | A) | prohibited banks from selling stocks and bonds |
| | B) | allowed banks to merge with other financial services firms and offer each other's services |
| | C) | discouraged financial innovation and competition |
| | D) | increased the number of banks and financial services firms |
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| 9 | |
MZM (money zero maturity) differs from M2 in that MZM: |
| | A) | adds large time deposits |
| | B) | subtracts small time deposits and adds businesses' money market mutual fund balances |
| | C) | adds businesses' money market mutual fund balances and consumer credit card balances |
| | D) | includes only coins and currency |
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| 10 | |
An opening on the Federal Reserve Board of Governors is filled via an appointment made by: |
| | A) | the remaining members of the Board |
| | B) | Congress |
| | C) | a committee of commercial bank presidents |
| | D) | the President |
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