1. M1 includes: a. cash and travelers\' checks. b. cash, checking account balanc
ID: 1255073 • Letter: 1
Question
1. M1 includes:a. cash and travelers' checks.
b. cash, checking account balances, and travelers' checks.
c. cash, travelers checks', and bank deposits
d. cash, checking account balances, and saving accountbalances.
e. cash, bank deposits, and money market accounts.
2. Money almost always serves as the standard unit for quotingprices. This is another way of saying money serves as a:
a. medium of exchange.
b. store of value.
c. standard of value.
d. commodity itself.
e. all of the above are correct.
3. Which of the following is the best definition of money?
a. anything generally accepted as a payment for goods or repaymentof debt
b. anything that is a liability of the federal government
c. anything that is a liability of a commercial bank
d. coins and currency in the hands of the public
4. A gold standard is:
a. a measurement of the importance of a good; it indicates highquality.
b. the basis for monetary exchange internationally.
c. an internationally recognized means for defining currencyexchange rates.
d. a system where currency (e.g., the dollar) was defined asequivalent in value to a certain
amount of gold.
5. With the invention of banking, one important aspect of money wasthat:
a. individuals have no discretion over the money supply.
b. government lost all control over the money supply.
c. banks have some discretion over the money supply.
d. banks have full control over the money supply.
e. money was out of control.
6. Fractional reserve banking takes its name from the factthat:
a. banks hold only a fraction of their reserves at the bankitself.
b. banks keep only a fraction of total deposits on reserve.
c. banks lend only a fraction of their total reserves tocustomers.
d. banks reserve only a fraction of their activity for lending.
e. banks reserve only a fraction of their cash for tellerusage.
Explanation / Answer
2. C 3. A 4. B 5. E 6.A Hope it helps!Related Questions
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