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Fundamentals of Money Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. How is the US dollar's value determined today?

Question 2 2. Bill earns $50,000 a year. If he gets a raise that comes with a new salary of $80,000 what can be said about his standard of living based on the concept that money acts as a standard of value?

Question 3 3. What year did the United States go off of the gold standard?

Question 4 4. What advantage does using money as a standard of value have over barter?

Question 5 5. In economics, the word 'liquid' refers to which of the following?

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Question 6 6. Which of the following is a component of M1?

Question 7 7. Which of the following measures of the money supply is largest?

Question 8 8. Which of the following statements is true regarding the money supply?

Question 9 9. Money functions as a medium of exchange except for in the case of:

Question 10 10. The function of money is:

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Question 11 11. Which of the following is the best explanation of money?

Question 12 12. If most people in an economy are willing to trade goods and services for money, what function is money serving?

Question 13 13. Which of the following are types of bank assets?

Question 14 14. Which of the following is an example of a consumer loan?

Question 15 15. Which matches the definition of a bank liability?

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Question 16 16. Because banks deal in loans or savings that might have adjustable rates that are dependent on the prime rate or T-bill rate, _____.

Question 17 17. What is a store of value?

Question 18 18. What can make the value of money unpredictable?

Question 19 19. Which of the following is the best explanation of money?

Question 20 20. What does money as a store of value help facilitate?

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Question 21 21. When a deposit is made into a bank, what does the bank do?

Question 22 22. How does the economy change every time banks loan out excess reserves?

Question 23 23. Lydia deposits $70,000 into the First National Bank of Ceelo. The required reserve ratio is 10%. How much will the money supply increase if the bank loans out excess reserves?

Question 24 24. Which of the following is NOT true regarding the role of banks in the economy?

Question 25 25. The money multiplier is a relationship between which two drivers?

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Question 26 26. If banks have excess reserves of $5,000, and the money supply increased by $20,000, what is the reserve ratio?

Question 27 27. Assume that the reserve requirement is 25%. If banks have excess reserves of $10,000, which of the following is the maximum amount of additional money that can be created by the banking system through the lending process?

Question 28 28. When $1,000 gets deposited into the banking system, and the reserve ratio is 10%, what is the most the money supply could increase?

Question 29 29. The US dollar's value use to be based on the _____.

Question 30 30. Loretta deposits money into her savings account. If all other factors are held constant, how does this affect M2?

Fundamentals of Money Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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