1) Stock price quotation for a corporate stock offered at 101 1/2

a. medium of exchange

b. store of value

c. unit of measurement

2) Paying $35 for a book at the bookstore

a. medium of exchange

b. store of value

c. unit of measurement

3) $35,000 price quote for a new Infiniti

a. medium of exchange

b. store of value

c. unit of measurement

4) In the United States, the money supply (M1) is not

a. checkable deposits

b. paper money in circulation

c. gold certificates

d. coins

e. none of these

5) When money specifies the value of something, what function does it serve?

a. medium of exchange

b. store of value

c. unit of measurement

d. standard of payment

6) Which of the following best describes checkable deposits?

a. Checkable deposits are checkable accounts which can be placed only in commercial banks

b. Checkable deposits are subject to the time restrictions of commercial banks in which they are held

c. Checkable deposits are liabilities to banks, payable upon request of the depositor

d. Checkable deposits are a form of near money

7) Are checkable deposits really money?

a. yes, because they can be converted on demand into currency

b. no, because they are only commercial bank liabilities

c. yes, because they can be used to make purchases of goods and services

d. no, because they are ultimately only entries in the balance sheets of banks

8) Banks create money when they

a. add to their reserves in the Federal Reserve Bank

b. accept deposits of cash

c. sell government bonds

d. exchange demand deposits for the loans given to businesses and individuals

9) How much money will be created from a $1000 deposit if the reserve requirement is 20% and the banks are fully loaned? (you may choose one or more answers)

a. $1000

b. $2000

c. $4000

d. $8000

e. $12000