1.The existence of money leads to a. greater specialization in production, but not to a higher standard of living. b. a higher standard of living, but not to greater specialization. c. greater specialization and to a higher standard of living. d. neither greater specialization nor to a higher standard of living. ____2.Which of the following best illustrates the medium of exchange function of money? a. You keep some money hidden in your shoe. b. You keep track of the value of your assets in terms of currency. c. You pay for your oil change using currency. d. None of the above is correct. ____3.Which of the following best illustrates the concept of a store of value? a. You are a precious-metals dealer, and you are always aware of how many ounces of platinum trade for an ounce of gold. b. You sell items on eBay, and your prices are stated in terms of dollars. c. You keep 6 ounces of gold in your safe-deposit box at the bank for emergencies. d. None of the above is correct. ____4.When in France you notice that prices are posted in euros, this best illustrates money's function as a. a store of value. b. a medium of exchange. c. a unit of account. d. a method of barter. ____5.Commodity money is a. backed by gold. b. the principal type of money in use today. c. money with intrinsic value. d. receipts created in international trade that are used as a medium of exchange. ____6.Currently, U.S. currency is a. fiat money with intrinsic value. b. fiat money with no intrinsic value. c. commodity money with intrinsic value. d. commodity money with no intrinsic value. ____7.The legal tender requirement means that a. people are more likely to accept the dollar as a medium of exchange. b. the government must hold enough gold to redeem all currency. c. people may not make trades with anything else. d. All of the above are correct. ____8.The agency responsible for regulating the money supply in the United States is a. the Comptroller of the Currency. b. the U.S. Treasury. c. the Federal Reserve. d. the U.S. Bank. ____9.Who was appointed Chair of the Board of Governors in 2017 by President Donald Trump? a. Ben Bernanke b. Jerome Powell c. Timothy Geithner d. Janet Yellen ____10.Which of the following is correct? a. The Federal Reserve has 14 regional banks. The Board of Governors has 12 members who serve 7-year terms. b. The Federal Reserve has 14 regional banks. The Board of Governors has 7 members who serve 14-year terms. c. The Federal Reserve has 12 regional banks. The Board of Governors has 12 members who serve 7-year terms. d. The Federal Reserve has 12 regional banks. The Board of Governors has 7 members who serve 14-year terms. ____11.At the Federal Reserve, a. the nation's monetary and fiscal policies are made by the Federal Open Market Committee, which meets about every six weeks. b. the nation's monetary and fiscal policies are made by the Federal Open Market Committee, which meets twice a year. c. the nation's monetary policy is made by the Federal Open Market Committee, which meets about every six weeks. d. the nation's monetary policy is made by the Federal Open Market Committee, which meets twice a year. ____12.At any given time, the voting members of the Federal Open Market Committee include a. five of the presidents of the regional Federal Reserve banks. b. the president of the Federal Reserve Bank of New York. c. the seven members of the Board of Governors. d. All of the above are correct. ____13.In response to the Corona crisis, the Fed is currently conducting open-market purchases, in which it is a. buying government bonds from the public, and in so doing increases the money supply. b. buys government bonds from the public, and in so doing decreases the money supply. c. selling government bonds to the public, and in so doing increases the money supply. d. selling government bonds to the public, and in so doing decreases the money supply. ____14.If a bank that desires to hold no excess reserves and has just enough reserves to meet the required reserve ratio of 10 percent receives a deposit of $400 it has a a. $400 increase in excess reserves and no increase in required reserves. b. $400 increase in required reserves and no increase in excess reserves. c. $360 increase in excess reserves and a $40 increase in required reserves. d. $40 increase in excess reserves and a $360 increase in required reserves. ____15.If the reserve ratio is 2.5 percent, then the money multiplier is a. 40. b. 25. c. 2.5. d. 1.25. ____16.If the reserve ratio is 5 percent, then $2,500 of additional reserves can create up to a. $62,500 of new money. b. $50,000 of new money. c. $45,600 of new money. d. $37,500 of new money. ____17.During the Great Depression in the early 1930s, a. bank runs closed many banks. b. the money supply rose sharply. c. the Fed decreased reserve requirements. d. both a and b are correct. ____18.Today, bank runs are a. uncommon because of the high reserve requirement. b. uncommon because of FDIC deposit insurance. c. common because of the low reserve requirement. d. common because the FDIC is nearly bankrupt. ____19.Between 1880 and 1896, the U.S. economy experienced deflation, which a. transferred wealth from creditors to debtors. b. transferred wealth from debtors to creditors. c. transferred wealth to both creditors and debtors. d. transferred wealth away from both debtors and creditors. ____20.Which movie is an allegory about late 19th century monetary policy? a. The Wizard of Oz b. Mary Poppins c. It's a Wonderful Life d. Trading Places