1. Money is legal tender if: a. it is backed by gold or silver. b. it is in a ba
ID: 1143868 • Letter: 1
Question
1. Money is legal tender if:
a. it is backed by gold or silver. b. it is in a bank account. c. it is commodity money. d. people willingly accept it in payment of debts. e. the government says it is.
2. Which of the following is incorrect regarding financial intermediaries?
a. They earn profits by loaning money. b. They offer lower interest rates on savings than they charge on loans. c. They accept deposits. d. They link savers and borrowers. e. They print money.
3. Savings deposits and time deposits are not included in M1 because these are not held by the nonbanking public.
a. True b. False
4. A decrease in the market interest rate, other things constant, will result in:
a. a leftward shift of the money demand curve. b. an increase in the slope of the money demand curve. c. a movement up along the money demand curve. d. a movement down along the money demand curve. e. a rightward shift of the money demand curve.
Explanation / Answer
Answer 1= Money is a Legal tender if e) Government says it.
Eg= Demonetisation of notes.
Answer 2 = e) They print money.
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