1.Which of the following statements is true? A.Money isn't a unit of account. B.Only gold can serve as money. C.Money is a medium of exchange. D.Money doesn't serve as a store of value. 2.Which of these could be classified as representative money? A.a fur coat B.a Bank note C.gold earrings D.diamonds 3.Why is using coins as money easier than using gold bars? A.coins are more portable B.coins are prettier C.coins are more limited in supply D.coins are more durable 4.Which of the following is the least liquid asset? A.a 3 year certificate of deposit B.cash C.money in a checking account D.coins 5.Which of the following is an example of M1 money? A.money in a savings account B.currency C.mutual fund shares D.money in a CD 6.Which of the following is an example of money as a unit of account? A.lending a friend $25.00 B.opening a savings account at a bank C.purchasing a toy for $8.99 D.checking the price of a camera at several stores before buying it at the lowest price 7.California gold miners paid for goods with gold nuggets or gold dust. What was the function of gold? A.It was used as representative money. B.It was used as part of a barter system. C.It was used as a currency. D.It was used as fiat money. 8.What happens when you make a purchase using a credit card? A.The store where you made the purchase borrows money from a bank. B.The money is immediately deducted from your account. C.The amount of the purchase is deducted from a prepaid account. D.The credit card issuer (bank) pays the store, and you owe the bank the money. 9.What is the largest source of income for banks? A.fees charged to customers for accounts B.the interest they receive from loans C.special accounts such as NOW accounts D.money deposited in savings accounts 10.What happens during a bank run? A.More customers withdraw money than the bank has on hand. B.The price of gold suddenly increases. C.States charter more banks than needed. D.The government orders a bank to close. 11.What is the purpose of the Federal Deposit Insurance Corporation (FDIC)? A.to make sure that the government has enough gold to cover its expenses B.to make sure that customers do not lose money if a bank fails C.to make sure that banks charge a fair amount of interest on loans D.to make sure that banks do not fail 12.Which is an example of people bartering? A.Instead of paying for a purchase in Mexico in pesos, you use dollars from the United States. B.Instead of paying rent, you clean the house for the owner. C.Instead of paying cash for a computer, you use a credit card. D.Instead of paying the full amount for a car, you pay 10 percent in cash and pay for the rest in monthly installments. 13.What is a mortgage used to purchase? A.real estate (homes, land) B.business expenses C.college tuition D.car 14.In the 2008, the people of Zimbabwe lost confidence in the value of the Zimbabwe dollar, and many were no longer willing to sell goods and services in exchange for it. Which characteristic of money did the Zimbabwe currency lack? A.beauty B.acceptability C.uniformity D.durability 15.Arianna makes a deposit of $20,000 into her Chase Bank savings account. Chase Bank holds 10% of her deposit, then lends the remaining $8,000 to Timothy to buy a new car. This practice of retaining only a portion of deposits on hand is called A.the Federal Reserve system. B.representative money. C.fractional reserve banking. D.the gold standard. 16.Sharon is an artist, and Neil is a carpenter. Sharon agrees to paint a portrait of Neil's family in exchange for a handmade table created by Neil. How did Sharon and Neil pay for the goods in their transaction? A.with currency B.using a store of value C.with money D.through bartering 17.Drake borrowed $36,000 to buy a car. Her loan will be paid off in 5 years. By the time that she pays off the loan, she will have made $40,327 in payments. Why did he have to pay $4,327 more than the price of the car? A.She had to pay interest of $4,327 for the privilege of borrowing the creditor of $36,000. B.She had to pay a default of $4,327 for the privilege of borrowing the principal of $36,000. C.She had to pay principal of $4,327 for the privilege of borrowing the mortgage of $36,000. D.She had to pay interest of $4,327 for the privilege of borrowing the principal of $36,000. 18.What condition is necessary for a fiat money system to work? A.The government must limit how much money is printed. B.Customers with checking accounts cannot earn interest on those accounts. C.Money owed must be paid on time. D.Banks must hold sufficient gold to cover any paper money they give out