Economics Principles and Practices © 2012 Georgia

Chapter 14: Money, Banking, and the Fed

Self-Check Quizzes

1
An example of commodity money used by early colonists in Virginia was _____.
A)barter
B)tobacco
C)wampum
D)the Continental
2
A seller accepting money for a service reflects the use of money as a ______.
A)medium of exchange
B)store of value
C)measure of value
D)unit of barter
3
Of the following forms of money, the one with the least durability was the ______.
A)iron spears of the Masai
B)stones of the Yap Islanders
C)musket balls of the colonials
D)compressed cheese of early Russians
4
Paper currency backed by gold placed on deposit with the United States Treasury was known as a ______.
A)monetary standard
B)legal tender
C)gold certificate
D)gold standard
5
Currency that must be accepted in payment for debts is known as _____.
A)silver certificates
B)greenbacks
C)legal tender
D)national currency
6
The Federal Deposit Insurance Corporation (FDIC) provides all of the following benefits EXCEPT ______.
A)replacement of individuals' deposits in case of a bank failure
B)a sense of security in banking that prevents runs on banks
C)assurance that the number of banks will remain constant
D)protection for consumers against fraudulent banks
7
Under a fractional reserve banking system, banks ______.
A)hold more reserves than deposits
B)generally lend out a majority of the funds deposited
C)cause the money supply to fall by lending out reserves
D)All of the above are correct
8
Regulation Z requires that sellers disclose all the following facts to borrowers EXCEPT the _______.
A)size of the down payment
B)number and size of the monthly payments
C)portion of their income needed for payments
D)total amount of interest over the life of the loan
9
If the Fed wants to expand the money supply it can ______.
A)raise the reserve requirement
B)lower the reserve requirement
C)do away with the reserve requirement
D)keep the reserve requirement stable
10
When the Fed expands the money supply, the short-run impact is ______.
A)increased interest rates
B)decreased interest rates
C)increased inflation
D)decreased inflation
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