1.This economist is considered to be the founder of the "Austrian School" of economic thought:

a. Ludwig von Mises

b. Karl Menger

c. Bohm-Bawerk

d. Murray Rothbard

e.Friedrich Hayek

2.When Rothbard wrote the Mystery of Banking, measures of the money supply:

a.were limited to the "monetary base" and M1.

b.were limited to M1a and M1b.

c.went up to M8.

d.ranged from M1 to M27.

e.were not yet developed.

3.According to Rothbard, classical economists associated with the _____ did not understand that checking accounts (bank deposits) were part of the money supply.

a.Currency School

b.Money Standard School

c.Fiat School of Money

d.Gold Standard

e.Continental Club

4.Who does Rothbard claim demonstrated that money could not have been created by the state?

a.John Maynard Keynes.

b. Ludwig von Mises.

c. Friedrich Hayek.

d.Adam Smith.

e.Karl Marx.

5.As Rothbard explains, while if some people in a community use fish as a medium of exchange, we would say that:

a.fish serve as an instrument of indirect exchange.

b.fish cannot yet be considered as money.

c.these people must not have any copper.

d.All of the above.

e.Only A and B of the above.

6.According to Rothbard, which of the following have historically been used as money?

a.Cowrie shells.

b.Beaver.

c. Tobacco.

d. Iron hoes.

e.All of the above.

7.Bill has chickens that lay eggs. Bob has pigs that can be turned into tasty bacon.Joe has materials to make 3-legged stools. Bill wants a stool, but Joe wants bacon. Lucky for Bill, Bob wants eggs. In order for Bill to acquire a 3-legged stool what must serve as a medium of exchange?

a.Eggs.

b.Bacon.

c.3-legged stools.

d.Chickens.

e.Pigs.

8.As Rothbard points out, the monetary units that nations have historically used were:

a.arbitrarily created by kings, emperors, or other national leaders.

b.measures of differing weights of gold or silver.

c.never exchangeable for a commodity.

d.always based on a metric-like system.

e. All of the above.

9.The British "pound sterling" originally was a monetary unit that represented:

a. a pound of bronze.

b. a pound of gold.

c. a pound of silver.

d. a pound of copper.

e.an ounce of gold.

10.Other than gold and silver, another metal often used as money has been:

a.titanium.

b.lead.

c.copper.

d.iron.

e.paper.

11.One of the problems with barter is:

a.the triple coincidence of wants.

b.that it makes business formation too easy.

c.it is prone to inflation.

d.dealing with indivisibilities.

e.agreeing on the form of money to use.

12.In the absence of money, people:

a. may barter to trade.

b. likely produce a greater variety of goods themselves.

c. probably will engage in both direct exchange and indirect exchange

d. All of the above.

e. None of the above.

13. A barter system requires:

a. a medium of exchange.

b. a double coincidence of wants.

c. use of a commodity money.

d. prices measured in nominal terms.

e. All of the above.

14.According to the authors of the text, money is a force multiplier in that it:

a.eliminated the disadvantage that arises from the double coincidence of wants.

b.reduces the number of prices.

c.provides valuable role for gold in a money economy.

d.All of the above.

e.Only A and B of the above.

15.When the Soviet Union collapsed, the _____ experienced _____.

a. euro;inflation

b. ruble;inflation

c. kopek;deflation

d.dollar; deflation

e.dollar; inflation

16.In the POW camp story, the prisoners came to use cigarettes as money:

a.which they produced themselves, after giving a share to their German captors.

b. which they received in care packages.

c.which were never smoked, due to their high value as money.

d.when they ran out of jam, which they considered an even more suitable money.

e.All of the above.

17.The exchange economy within the POW camp would experience price fluctuations when:

a.new prisoners would arrive.

b.new Red Cross packages would arrive.

c.the camp was subject to bombing raids.

d.All of the above.

e. Only A and B of the above.

18.This item was generally worth the least amount in the POW camps:

a.cigarettes.

b.tins of jam.

c.margarine.

d.tinned beef.

e.tinned carrots.

19.The POW camps used to illustrate the use of money were mostly in:

a. Russia.

b. Japan.

c. Korea.

d.the U.S.

e.None of the above.

20.As noted by Chappelow, macroeconomics, in its modern form, is said to have started with the writings of:

a.Thomas Carlyle.

b.Adam Smith.

c.Thomas Malthus.

d.John Maynard Keynes.

e.Karl Menger.

21.According to Salerno, the Mystery of Banking is considered Murray Rothbard's:

a.most important work.

b.least appreciated work.

c.longest work.

d.most widely cited work.

e.most difficult to understand work.

22.According to Salerno, Rothbard viewed the Federal Reserve as:

a. a bolstering of the banking system.

b.the outcome of public spirited responses to shocks to our economy.

c.an almost perfect example of an institution that works on behalf of the general public interest.

d. a cartelizing device that limits entry into banking.

e.All of the above.

23.Which of the following illustrates the principle of direct exchange?

a.You trade a chicken for a ten dollar bill.

b.You trade a chicken for a hat.

c.You trade a chicken for a ten pound bag of potatoes, which you then trade for a hat.

d.All of the above.

e.None of the above.

24.Which of the following economists won the Nobel Prize in Economics?

a. Carl Menger.

b. Friedrich Hayek.

c. Ludwig von Mises.

d. Murray Rothbard.

e.John Maynard Keynes.

25.Suppose that you raise chickens for their eggs and use them to trade with others for goods that you want. If you trade eggs for bacon, from someone who raises pigs and wants eggs, we would say that eggs are:

a.used for direct exchange.

b.used for indirect exchange.

c. a medium of exchange.

d.money.

e.All of the above.

26.From 1879 to 1933, the U.S. was on a ___ gold standard, which was ___ per ounce.

a.partial; $35

b.full; $35

c.partial; $20.67

d.partial; $42

e.full; $20.67

27. When considering Bitcoin, we can say that it:

a.is neither money nor a medium of exchange.

b.is both money and a medium of exchange.

c.is money but is not a medium of exchange.

d.is not money but is a medium of exchange.

28. Diamonds might be good to use as money because they are:

a. divisible.

b. durable.

c. portable.

d. All of the above.

e. Only B and C of the above.

29. Which of the following would be consistent with a "fiat" money?

a. It is portable.

b. It is a commodity money.

c. It can be converted into a precious metal.

d. It is indivisible.

e. All of the above.

30.You walk into a store in Mexico.The prices are in pesos. The owner will accept pesos or dollars. In this case, we can say that:

a. the peso is the unit of account.

b. the dollar is a medium of exchange.

c. the peso is a medium of exchange.

d. All of the above.

e. None of the above.

31.During a period of hyperinflation, money is not functioning well as a:

a. medium of exchange.

b. unit of account.

c. store of value.

d. unit of barter.

e. measure of taxation.

32. Which of the following is/are desirable attributes of a medium of exchange?

a. Durability.

b. Proportionality.

c. Divisibility.

d. All of the above.

e. Only A and C of the above.

33.The actual name of the currency that we use as money in the United States is called a:

a.Gold Certificate.

b.Silver Certificate.

c.Dollar.

d.Continental.

e.Federal Reserve Note.

34.U.S. currency today can be described as:

a. a commodity money.

b. a representative money.

c. a fiat money.

d.All of the above.

e.None of the above.

35.An example of a local currency cited in the lecture was the:

a.Flagstaff Neighborly Note.

b.Coconino Coupon.

c.Arizona Buck.

d.Deseret Deposit receipt.

e.Sonoran Reserve Money.

36.The limestone wheels that served as money on the South Pacific island nation of Yap would seem, at first glance, to be a poor form of money because they:

a.are not durable.

b.are not easily recognized.

c.are not scarce.

d.are not portable.

e.are not commodities.

37.In lamenting the problem of inflation, who wrote that, "A wagon load of money will scarcely purchase a wagon load of provision"?

a.George Washington.

b.Thomas Jefferson.

c. Alexander Hamilton.

d. Benjamin Franklin.

e.Abraham Lincoln.

38. The functions of money include all of the following, except as a:

a. medium of exchange.

b. store of value.

c. measure of barter.

d. unit of account.

e. standard of deferred payment.

39.The U.S. was on a full gold standard, where our currency was freely redeemable for gold by anyone, up until:

a.1879.

b.1913.

c.1933.

d.1945.

e.1971.