Question 1

KaleeAnn keeps $50 a month in her drawer to be used 2 years from now. Which function of money are those dollars performing?

Group of answer choices

A. medium of exchange

B. standard of wealth

C. deferred payment

D. store of value

Question 2

If interest rates fall to a very low level, then,ceteris paribus, __________.

Group of answer choices

A. individuals will hold less money

B. individuals will buy government bonds

C. the velocity of money will fall

D. the velocity of money will not change

Question 3

Which of the following tends to reduce the effect of an expansionary open market operation on the money supply?

Group of answer choices

A. the sale of bonds to the Fed by banks

B. the sale of bonds to the Fed by the public

C. increases in banks' excess reserves

D. increases in banks' lending activity

Question 4

__________ is the ability of an asset to be converted easily and conveniently into the medium of exchange.

Group of answer choices

A. Convertibility

B. Liquidity

C. Accessibility

D. Solidity

Question 5

The __________ rule is a form of monetary policy that stipulates that for each 1% increase in inflation, the Fed should increase the nominal interest rate by more than 1%.

Group of answer choices

A. Greenspan

B. Bernanke

C. Friedman

D. Taylor

Question 6

When the Fed sets an interest rate target, on what interest rate does it specifically focus?

Group of answer choices

A. the T-bill rate

B. nominal rate

C. the prime rate

D. the federal funds rate

Question 7

Sandra is seeking a loan from the Bank of Smallville. The "price" for her loan money is the __________.

Group of answer choices

A. principle

B. interest rate

C. collateral

D. premium

Question 8

Which of the following equations is TRUE?

Group of answer choices

A. assets = liabilities - net worth

B. assets = liabilities + net worth

C. liabilities = assets + net worth

D. net worth = liabilities - assets

Question 9

The Great Recession occurred in __________.

Group of answer choices

A. 1929-1933

B. 1937-1939

C. 1953-1955

D. 2007-2009

Question 10

Which of the following will prevent the money supply from expanding so much that it reaches its potential maximum?

Group of answer choices

A. a change in interest rates

B. currency deposits by the public

C. banks' refusal to hold excess reserves

D. currency withdrawals by the public