1/ Money that some authority, generally a government, has ordered to be accepted

Question

1/ Money that some authority, generally a government, has ordered to be accepted as a medium of exchange is called _______ money
A/fiat
B/intrinsic
C/commodity
D/debt

2/If the banking system has $2,000 in excess reserves, then it can expand deposits at most by $10,000 if the required reserve ratio is 10%.
A/True
B/False

3/The value of the simple money multiplier tends to be greater when individuals hold less cash.
A/True
B/False

4/Keeping a $20 bill in your purse to purchase a movie DVD when it comes out next month means that money functions as a
A/medium of exchange.
B/unit of account
C/standard of deferred payment.
D/store of value.

5/A bank has $100,000 in checkable deposits and $30,000 in reserves. If the required reserve ratio is 10%, what is the amount of excess reserves?
A/$0
B/$10,000
C/$20,000
D/$30,000

Explanation / Answer

1.a 2.b 3.a 4.a 5.b

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