Chapter 3: What is Money
This activity contains 16 questions.
1) Economists find no completely satisfactory way to measure money because
A) money supply statistics are a state secret.
B) the Federal Reserve does not employ or report different measures of the money supply.
C) the \"moneyness\" or liquidity of an asset is a matter of degree.
D) economists find disagreement interesting and refuse to agree for ideological reasons.
2) To an economist, ________ is anything that is generally accepted in payment for goods and services or in the repayment of debt. A) wealth B) income C) money D) credit
3) Currency includes A) paper money and coins.
B) paper money, coins, and checks. C) paper money and checks.
D) paper money, coins, checks, and savings deposits. Answer:
4) Of money's three functions, the one that distinguishes money from other assets is its function as a A) store of value. B) unit of account.
C) standard of deferred payment. D) medium of exchange.
5) When compared to exchange systems that rely on money, disadvantages of the barter system include: A) the requirement of a double coincidence of wants. B) lowering the cost of exchanging goods over time.
C) lowering the cost of exchange to those who would specialize. D) encouraging specialization and the division of labor.
6) When economists say that money promotes ________, they mean that money encourages specialization and the division of labor. A) bargaining
PDF 文件使用 \"pdfFactory Pro\" 试用版本创建 www.fineprint.com.cn
B) contracting C) efficiency D) greed
7) Which of the following statements best explains how the use of money in an economy increases economic efficiency?
A) Money increases economic efficiency because it is costless to produce.
B) Money increases economic efficiency because it discourages specialization. C) Money increases economic efficiency because it decreases transactions costs.
D) Money cannot have an effect on economic efficiency.
8) For a commodity to function effectively as money it must be A) easily standardized, making it easy to ascertain its value. B) difficult to make change.
C) deteriorate quickly so that its supply does not become too large. D) hard to carry around.
9) Whatever a society uses as money, the distinguishing characteristic is that it must
A) be completely inflation proof.
B) be generally acceptable as payment for goods and services or in the repayment of debt. C) contain gold.
D) be produced by the government.
10) Compared to checks, paper currency and coins have the major drawbacks that they A) are easily stolen.
B) are hard to counterfeit.
C) are not the most liquid assets. D) must be backed by gold.
11) As the payments system evolves from barter to a monetary system, A) commodity money is likely to precede the use of paper currency. B) transaction costs increase.
C) the number of prices that need to be calculated increase rather dramatically. D) specialization decreases.
12) Paper currency that has been declared legal tender but is not convertible into coins or precious metals is called ________ money. A) commodity B) fiat
C) electronic
PDF 文件使用 \"pdfFactory Pro\" 试用版本创建 www.fineprint.com.cn
D) funny
13) When paper currency is decreed by governments as legal tender, legally it must be ________. A) paper currency backed by gold
B) a precious metal such as gold or silver C) accepted as payment for debts
D) convertible into an electronic payment
14) The evolution of the payments system from barter to precious metals, then to fiat money, then to checks can best be understood as a consequence of the fact that
A) paper is more costly to produce than precious metals. B) precious metals were not generally acceptable.
C) precious metals were difficult to carry and transport. D) paper money is less accepted than checks.
15) Which of the following sequences accurately describes the evolution of the payments system?
A) Barter, coins made of precious metals, paper currency, checks, electronic funds transfers
B) Barter, coins made of precious metals, checks, paper currency, electronic funds transfers
C) Barter, checks, paper currency, coins made of precious metals, electronic funds transfers
D) Barter, checks, paper currency, electronic funds transfers
16) The components of the U.S. M1 money supply are demand and checkable deposits plus A) currency.
B) currency plus savings deposits. C) currency plus travelers checks.
D) currency plus travelers checks plus money market deposits.
PDF 文件使用 \"pdfFactory Pro\" 试用版本创建 www.fineprint.com.cn
Answer:
1 C 9 B
2 C 10 A
3 A 11 A
4 D 12 B
5 A 13 C
6 C 14 C
7 C 15 A
8 A 16 C
PDF 文件使用 \"pdfFactory Pro\" 试用版本创建 www.fineprint.com.cn
Chapter 5: Why Do Interest Rates Change?
This activity contains 12 questions.
1. Which of the following will not increase the demand for an asset?
a) Wealth increases.
b) The asset's liquidity rises relative to other assets. c) The asset's risk increases relative to other assets.
d) The asset's expected return rises relative to other assets.
2. Stock A has an expected return of 15% with a standard deviation of
returns of 10%. Stock B has an expected return of 15% with a standard deviation of returns of 5%. Most investors are _____, which means they would prefer to invest in _____. a) risk averse; Stock A b) risk lovers; Stock B c) risk averse; Stock B d) risk lovers; Stock A
3. When people expect interest rates to rise in the future, the _____
curve for bonds shifts to the _____. a) supply; left b) demand; right c) supply; right d) demand; left
4. An increase in the expected rate of inflation will _____ the expected
return on bonds relative to that on _____ assets. a) reduce; financial b) reduce; real c) raise; financial d) raise; real
5. An increase in the expected rate of inflation causes the demand for
bonds to _____ and the supply of bonds to _____. a) fall; fall b) rise; fall c) fall; rise d) rise; rise
6. During a business cycle expansion, the supply of bonds shifts to the
_____ as businesses perceive more profitable investment
opportunities, while the demand for bonds shifts to the _____ as a
PDF 文件使用 \"pdfFactory Pro\" 试用版本创建 4 www.fineprint.com.cn
result of the increase in wealth generated by the economic expansion. a) left; right b) left; left c) right; right d) right; left
7. Government budget surpluses shift the bond ______ curve to the
______.
a) supply; right b) supply; left c) demand; right d) demand; left
8. When stock prices become _____ volatile, the demand curve for
bonds shifts to the _____ and the interest rate _____. a) less; left; falls b) more; left; falls c) less; left; rises d) more; right; falls e) more; right; rises
9. Liquidity refers to
a) the amount of wealth a person has to invest.
b) the ease with which an asset can be turned into cash. c) the size of an asset's expected return.
d) the stability of an asset's expected return.
10. The Fisher effect is the _____ relationship between _____ and
_____.
a) direct; expected inflation; interest rates b) inverse; expected inflation; interest rates c) direct; interest rates; bond prices d) inverse; interest rates; bond prices
11. Which of the following causes the interest rate to rise, ceteris
paribus?
a) a decrease in expected inflation b) an increase in investors' wealth c) a decrease in stock prices
d) an increase in the government budget deficit
12. If the interest rate is below equilibrium, then there is excess _____
in the bond market and bond prices will _____.
PDF 文件使用 \"pdfFactory Pro\" 试用版本创建 www.fineprint.com.cn
a) b) c) d) supply; fall demand; fall demand; rise supply; rise
Answer:
1 c 7 b
2 c 8 d
3 d 9 b
4 b 10 a、d
5 c 11 d
6 c 12 a
PDF 文件使用 \"pdfFactory Pro\" 试用版本创建 www.fineprint.com.cn
