ECON 110 QUIZ 6 PDF

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ECON 110 QUIZ 6 Question 1 0.5 / 0.5 pts Economies where goods and services are traded directly for other goods and services are called ________ economies. trade barter direct seigniorage ANSWER: b Question 2 0 / 0.5 pts Which of the following functions of money would be violated if inflation were high? unit of account store of value certificate of gold medium of exchange ANSWER: b Question 3 0.5 / 0.5 pts A car dealer sells you a car today in exchange for money in the future. This illustrates which function of money? medium of exchange unit of account store of value standard of deferred payment ANSWER: d Question 4 0.5 / 0.5 pts The Federal Reserve's narrowest definition of the money supply is M0. M1. M2. M3. ANSWER: b Question 5 0.5 / 0.5 pts In the United States, currency includes gold, silver, and paper money. checking and savings account deposits. paper money and coins in circulation. traveler's checks. ANSWER: c Question 6 0.5 / 0.5 pts

Credit card balances are part of M1. part of M2. part of M3. not part of the money supply. ANSWER: d Question 7 0.5 / 0.5 pts The required reserves of a bank equal its ________ the required reserve ratio. deposits divided by deposits multiplied by loans divided by loans multiplied by ANSWER: b Question 8 0.5 / 0.5 pts The more excess reserves banks choose to keep, the larger the deposit multiplier. the smaller the deposit multiplier. the higher the required reserve ratio. the lower the required reserve ratio. ANSWER: b Question 9 0.5 / 0.5 pts The Federal Reserve was established in 1913 to prevent inflation by decreasing the money supply. stimulate the economy by increasing bank reserves. stop bank panics by acting as a lender of last resort. prevent bad loans by requiring banks to hold reserves. ANSWER: c Question 10 0 / 0.5 pts Which of the following is not a function of the Federal Reserve System, or the "Fed"? acting as a lender of last resort acting as a banker's bank performing check clearing services insuring deposits in the banking system ANSWER: d...