1. Which of these is a key characteristic of money?

• satisfies law of demand
• satisfies double coincidence of wants
• portable
• facilitates bartering

2. Money is stable when?

• it is portable
• it is widely accepted for payment.
• its purchasing power does not vary over time
• it can be divided into smaller units, like change

3. The U.S. dollar is an example of

• inconvertible fiat money
• the gold standard
• barter exchange
• commodity money

4. Which of these is NOT a function of banks:

• they help to facilitate trade by providing alternative methods of payment
• they bring together savers and borrowers.
• they are responsible for the conduct of monetary policy
• safe places for people to store their wealth

5. Which of the following is included in GDP?

• value of existing home sales
• value of stock purchases
• child care performed by family member
• value of consumer spending

6. Which of the following is NOT true of inflation?

it is affected by the growth of the money supply

it describes an increase in the over-all level of prices of goods and services

it describes both increases in prices and decreases in prices

it is commonly measured by the CPI - the Consumer Price Index

7. The CPI measures:

the average cost of the goods and services purchased by consumers

measures the prices of all goods purchased by individuals and non-profit institutions.

the average cost of goods and services purchased by individuals and firms

the average price of food and fuel, the most volatilely-priced purchased goods

8. Which of the following describes a monetary policy?

infrastructure spending

increase in tax rates

federal open market operation

government issuance of U.S. securities

9. Which of these are causes of the Great Recession?

excessive banking regulation combined with rampant banking innovations.

large federal deficit

federal government tax cuts

weak banking regulation combined with rampant financial innovation

10. Which of the following describes an expansionary monetary policy? (Please select all correct answers)

A decrease in the reserve ratio

FOMC directive to purchase securities

FOMC directive to sell securities

Increase in the overnight federal funds rate