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| 1 | |
The group responsible for setting policy on buying and selling government securities (bills, notes, and bonds) is the: |
| | A) | Securities and Exchange Commission |
| | B) | U.S. Treasury Board |
| | C) | Federal Open Market Committee |
| | D) | 12 Federal Reserve Bank presidents |
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| 2 | |
Other things equal, a dramatic decrease in the money supply would: |
| | A) | increase the price level |
| | B) | reduce the purchasing power of each dollar |
| | C) | increase the purchasing power of each dollar |
| | D) | have an ambiguous impact on the purchasing power of each dollar |
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| 3 | |
Which of the following most accurately describes the status of the U.S. Federal Reserve System? |
| | A) | It is a publicly owned and managed agency of the federal government |
| | B) | It is privately owned but publicly managed |
| | C) | It is owned by a group of large private banks and managed for their profit |
| | D) | It is a publicly owned agency of the federal government, managed for profit by private banks |
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| 4 | |
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 |
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| 5 | |
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) |
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| 6 | |
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 |
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| 7 | |
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 |
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| 8 | |
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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| 9 | |
Use the following to answer the next question:Item | Billions of dollars | Checkable deposits | $2,500 | Currency held by the public | 50 | Currency held by banks | 25 | Small time deposits | 400 | Savings deposits and money | | market deposit accounts | 1,200 | Money market mutual funds | 700 | Large time deposits | 1,400 |
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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| 10 | |
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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