DO NOT RITE ON TEST Principles of Macroeconomics Exam 3 - Chapters 21,22,23,24 1
ID: 1118387 • Letter: D
Question
DO NOT RITE ON TEST Principles of Macroeconomics Exam 3 - Chapters 21,22,23,24 1. Which of the following is NOTa a. Unit of account b. Means of payment c. Store of purchasing power d. Backed by a precious metal of 2. As a means of payment, money must a. Hold its value over time b. Be the unit of measure as an expression of value c. Simplify the exchange of goods and services in the market d. Be worth more than the goods 3. Which of the folowing functions identies the abiliyof money to maintain ts value over ime? a. Unit of account b. Means of payment c. Store of purchasing power d. Backed by a precious metal e. C and D above 4. The most narrow measure of the money supply is a. M b. M2 c. M80 d. None of the above 5. As a measure of the money supply, M2 consists of a. Coins and paper money c. Money market mutual fund shares, money market deposit accounts, and saving deposits d. All of the above and transaction deposits bank makes a loan? 6. Which of the following does NOT occur when a a. The money supply increases b. The bank increases its liabilities c. The borrower increases their liabilities d. The bank increases its assets 7 bank buys a govermment security from an indvidual, what flct does this have on a cen the amount of money in circulation: a. Increases by the amount of the purchase times the money multiplier s by the amount of the purchase c. Decreases by an amount more than the purchase d. Does not changeExplanation / Answer
1) d is correct
Metal or material used to make the money has no relation with the value of money a coin or a paper note carry.
2) a is correct
If money does hold the value of over time, it will not solve the problem of double coincidence of wants that arise in barter system.
3) c is correct
Money can be stored and it's value is maintained over time because of which it can be used as medium payment or exchange.
4) a is correct
The most narrow money supply only includes currency and demand deposits, that is the most liquid assets.
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