Checkable deposits are classified as money because: Question 1 options: they can be readily used in purchasing goods and paying debts. banks hold currency equal to the value of their checkable deposits. they are ultimately the obligations of the Treasury. they earn interest income for the depositor. Save Question 2 (1 point) Question 2 options: $1.20. $1.25. $0.80. $1.10. Save Question 3 (1 point) Coins in people\'s pockets and purses are: Question 3 options: included in M1 but not in M2. included both in M1 and in M2. included in M2 but not in M1. excluded from M1 and M2 because people can exchange them for Federal Reserve notes. Save Question 4 (1 point) The various lender-of-last-resort programs implemented by the Fed in response to the financial crisis of 2007 and 2008: Question 4 options: severely depleted the assets of the Federal Reserve. have been little used, and therefore are ineffective. increased the moral hazard problem by limiting losses from bad financial decisions. were designed to offset the moral hazard created by the TARP and other bailout programs. Save Question 5 (1 point) Currency (paper money plus coins) constitutes about: Question 5 options: 24 percent of the U.S. M1 money supply. 45 percent of the U.S. M1 money supply. 51 percent of the U.S. M1 money supply. 55 percent of the U.S. M1 money supply. Save Question 6 (1 point) (Consider This) Credits cards are: Question 6 options: the fastest growing component of the M1 money supply. near-monies that are part of the M2 money supply but not the M1 money supply. not money, as officially defined. also known as time deposits. Save Question 7 (1 point) The money supply is backed: Question 7 options: by the government\'s ability to control the supply of money and therefore to keep its value relatively stable. by government bonds. dollar-for-dollar by gold and silver. by gold reserves representing a fraction of the total value of dollars in circulation. Save Question 8 (1 point) The purchasing power of money and the price level vary: Question 8 options: inversely. directly during recessions but inversely during inflations. directly but not proportionately. directly and proportionately. Save Question 9 (1 point) Which of the following financial institutions was acquired by Bank of America as a result of the financial crisis of 2007 and 2008? Question 9 options: Merrill Lynch Lehman Brothers Goldman Sachs AIG Save Question 10 (1 point) TIAA-CREF, Teamsters\' Union, and CalPERS are all primarily: Question 10 options: commercial banks. thrifts. insurance companies. pension funds. Save Question 11 (1 point) If you place a part of your summer earnings in a savings account, you are using money primarily as a: Question 11 options: medium of exchange. store of value. unit of account. standard of value. Save Question 12 (1 point) Assuming no other changes, if checkable deposits decrease by $40 billion and balances in money market mutual funds increase by $40 billion, the: Question 12 opti.

1. Checkable deposits are classified as money because:
Question 1 options:
they can be readily used in purchasing goods and paying debts.
banks hold currency equal to the value of their checkable deposits.
they are ultimately the obligations of the Treasury.
they earn interest income for the depositor.
Save
Question 2 (1 point)
Question 2 options:
$1.20.
$1.25.
$0.80.
$1.10.
Save
Question 3 (1 point)
Coins in people's pockets and purses are:
Question 3 options:
included in M1 but not in M2.
included both in M1 and in M2.
included in M2 but not in M1.
excluded from M1 and M2 because people can exchange them for Federal Reserve notes.
Save
Question 4 (1 point)
The various lender-of-last-resort programs implemented by the Fed in response to the financial
crisis of 2007 and 2008:
Question 4 options:
severely depleted the assets of the Federal Reserve.
have been little used, and therefore are ineffective.
increased the moral hazard problem by limiting losses from bad financial decisions.
were designed to offset the moral hazard created by the TARP and other bailout programs.
Save
Question 5 (1 point)
Currency (paper money plus coins) constitutes about:
Question 5 options:
24 percent of the U.S. M1 money supply.

2. 45 percent of the U.S. M1 money supply.
51 percent of the U.S. M1 money supply.
55 percent of the U.S. M1 money supply.
Save
Question 6 (1 point)
(Consider This) Credits cards are:
Question 6 options:
the fastest growing component of the M1 money supply.
near-monies that are part of the M2 money supply but not the M1 money supply.
not money, as officially defined.
also known as time deposits.
Save
Question 7 (1 point)
The money supply is backed:
Question 7 options:
by the government's ability to control the supply of money and therefore to keep its value
relatively stable.
by government bonds.
dollar-for-dollar by gold and silver.
by gold reserves representing a fraction of the total value of dollars in circulation.
Save
Question 8 (1 point)
The purchasing power of money and the price level vary:
Question 8 options:
inversely.
directly during recessions but inversely during inflations.
directly but not proportionately.
directly and proportionately.
Save
Question 9 (1 point)
Which of the following financial institutions was acquired by Bank of America as a result of the
financial crisis of 2007 and 2008?
Question 9 options:
Merrill Lynch
Lehman Brothers
Goldman Sachs

3. AIG
Save
Question 10 (1 point)
TIAA-CREF, Teamsters' Union, and CalPERS are all primarily:
Question 10 options:
commercial banks.
thrifts.
insurance companies.
pension funds.
Save
Question 11 (1 point)
If you place a part of your summer earnings in a savings account, you are using money primarily
as a:
Question 11 options:
medium of exchange.
store of value.
unit of account.
standard of value.
Save
Question 12 (1 point)
Assuming no other changes, if checkable deposits decrease by $40 billion and balances in money
market mutual funds increase by $40 billion, the:
Question 12 options:
M1 money supply will decline and the M2 money supply will remain unchanged.
M1 and M2 money supplies will not change.
M1 money supply will increase and the M2 money supply will remain unchanged.
M1 and M2 money supplies will both decline.
Save
Question 13 (1 point)
Firms whose central business is providing individual account shares of a group of stocks, bonds,
or both are known as:
Question 13 options:
insurance companies.
thrifts.
commercial banks.
mutual funds companies.

4. Save
Question 14 (1 point)
The members of the Federal Reserve Board:
Question 14 options:
serve seven-year terms.
are appointed by the American Economic Association.
are elected by votes of the 12 presidents of the Federal Reserve Banks.
are appointed for 14-year terms.
Save
Question 15 (1 point)
Between September 2007 and September 2009:
Question 15 options:
the Fed oversaw the conversion of all thrifts into commercial banks.
the FDIC closed more than 200 U.S. banks and shifted their deposits to other banks.
the Fed increased capital requirements for larger financial institutions in an effort to reduce
moral hazard.
the FDIC paid out more than $500 billion to depositors who held money in failed banks.
Save
Question 16 (1 point)
The Board of Governors of the Federal Reserve has ____ members.
Question 16 options:
5
7
9
14
Save
Question 17 (1 point)
New York Life, Prudential, and Hartford are all primarily:
Question 17 options:
commercial banks.
mutual fund companies.
insurance companies.
securities firms.
Save
Question 18 (1 point)
Other things equal, an excessive increase in the money supply will:

5. Question 18 options:
increase the purchasing power of each dollar.
decrease the purchasing power of each dollar.
have no impact on the purchasing power of the dollar.
reduce the price level.
Save
Question 19 (1 point)
The central authority of the U.S. banking system is the:
Question 19 options:
Federal Open Market Committee (FOMC).
Board of Governors of the Federal Reserve.
Federal Monetary Authority.
Council of Economic Advisers.
Save
Question 20 (1 point)
Question 20 options:
$1.50.
$0.33.
$0.50.
$2.00.
Save
Save All Responses
they can be readily used in purchasing goods and paying debts.
banks hold currency equal to the value of their checkable deposits.
they are ultimately the obligations of the Treasury.
they earn interest income for the depositor.
Solution
1) a
2) b
3) b
4) c
5)a
6) c
7) d

6. 8) a
9) a
10) d
11) b
12) a
13) d
14) d
15) c
16) b
17) c
18) b
19) a
20) d