1) Inflation erodes which of the following functions of money? a) Medium of exchange b) Unit of account c) Store of value d) Liquidity Which of the following is not a problem (or an unfulfilled necessary function) associated with the barter exchange system? a) Double coincidence of wants b) Unit of Account c) Store of Value d) Production Constraints Which of the following is not true of fiat money? a) 2) 3) It cannot be redeemed for anything except itself b) Its usefulness derives from its general acceptability c) It is backed by foreign exchange reserves and/or precious metals in Govt. deposit d) There are no significant physical constraints on its production When someone deposits $100 currency into their savings account, M1 a) Increases; increases b) Increases; decreases c) Decreases; increases d) None of the above Which of the following is not a major function of Central Banks? a) Managing the Money Supply b) Budget Balancing c) Financial Regulation d) Emergency Lending 41 d M2 an 5)