Mishkin Tb03 | Money | Euro

Chapter 3 What Is Money?

  Multiple Choice
)1 There is no single precise measure of money or the money supply for economists because ()a the government considers money supply statistics to be confidential and refuses to publish them. ()b deciding what is generally accepted in payment for goods and services or in the repayment of debt is difficult to determine. ()c economists cannot agree if currency should be considered money. ()d of each of the above. ()e of both (a) and (b) of the above. Answer: Question Status: revious !dition )" !conomists find no completely satisfactory way to measure money because ()f money supply statistics are a state secret. ()g the #ederal $eserve does not employ or report different measures of the money supply. ()h the %moneyness& or li'uidity of an asset is a matter of degree. ()i economists find disagreement interesting and refuse to agree for ideological reasons. Answer: Question Status: revious !dition )( )urrency includes ()* paper money and coins. ()+ paper money, coins, and chec+s. ()l paper money and chec+s. ()m paper money, coins, chec+s, and savings deposits. Answer: Question Status: revious !dition

-.  #rederic S. /ish+in 0 Economics of Money, Banking, and Financial Markets, Seventh !dition

)1

The difference between money and income is that ()n money is a flow and income is a stoc+. ()o money is a stoc+ and income is a flow. ()p there is no difference2money and income are both stoc+s. ()' there is no difference2money and income are both flows. Answer: Question Status: revious !dition

)-

3t is true that ()r income and wealth are both stoc+s. ()s money and income are both stoc+s. ()t income is a flow and wealth is a stoc+. ()u money and wealth are both flows. ()v money and income are both flows. Answer: Question Status: 4ew

)5

6hen people say, %7ill 8ates sure is rich, he has a lot of money,& they probably mean that 7ill 8ates ()w has a large chec+ing account balance. ()9 is 'uite wealthy. ()y has a relatively high income. (): all of the above. ()aaonly (a) and (b) of the above. Answer: Question Status: revious !dition

);

An individual<s annual salary is her ()bb money. ()ccincome. ()dd wealth. ()eeliabilities. ()ff assets. Answer: Question Status: 4ew

)=

A person<s house is part of her ()gg money. ()hh income. ()ii liabilities. ()** wealth. ()++ all of the above. Answer: Question Status: 4ew

)hapter ( 6hat 3s /oney>  5?

).

A person<s chec+ing deposits are part of her ()ll money. ()mm income. ()nn wealth. ()oo all of the above. ()pp only (a) and (c) of the above. Answer: Question Status: 4ew

)1?

A penny collection is ()'' money. ()rr income. ()ss wealth. ()tt all of the above. ()uu only (a) and (c) of the above. Answer: Question Status: 4ew

)11

/oney is ()vv anything that is generally accepted in payment for goods and services or in the repayment of debt. ()ww fre'uently2but incorrectly2used synonymously with wealth. ()99 paper money, coins, and chec+s. ()yy all of the above. ()::only (a) and (c) of the above. Answer: Question Status: $evised

)1"

/oney is ()aaa anything that is generally accepted in payment for goods and services or in the repayment of debt. ()bbb fre'uently2but incorrectly2used synonymously with wealth. ()ccc a flow of earnings per unit of time. ()ddd all of the above. ()eee only (a) and (b) of the above. Answer: Question Status: revious !dition

)1(

6hich of the following are true statements> ()fff 6ealth is the total collection of pieces of property that are a store of value. ()ggg /oney is fre'uently confused with income. ()hhh 3ncome is a flow of earnings per unit of time. ()iii All of the above are true. ()*** @nly (a) and (b) of the above are true. Answer: Question Status: revious !dition

()nnn All of the above are true. ()dddd money. ()vvv standard of deferred payment. and Financial Markets. ()ooo @nly (a) and (b) of the above are true. a unit of account. ()::: wampum. /ish+in 0 Economics of Money. ()yyy cigarettes. ()''' /oney is a flow variable. ()aaaa all of the above. and a store of value. ()rrr 3ncome is a stoc+ variable. Answer: Question Status: $evised )1= 3f peanuts serve as a medium of e9change. ()mmm 3ncome is a flow of earnings per unit of time.51  #rederic S. Answer: Question Status: revious !dition )1. Answer: Question Status: revious !dition )1- 6hich of the following are true statements> ()ppp 6ealth is the total collection of pieces of property that are a store of value. the one that distinguishes money from other assets is its function as a ()ttt store of value. ()ffff all of the above. ()www medium of e9change. Answer: Question Status: revious !dition )15 @f money<s three functions. Some of the forms money has ta+en throughout history include ()999 tobacco. Banking. ()lll /oney is a stoc+A it is a certain amount at a given point in time. ()sss All of the above are true. Seventh !dition )11 6hich of the following are true statements> ()+++ 6ealth is the total collection of pieces of property that are a store of value. ()eeee loanable funds. ()uuu unit of account. then peanuts are ()bbbb ban+ deposits. ()cccc reserves. Answer: Study 8uide .

()mmmm speciali:ation. ()pppp a common denominator to determine prices. ()9999 transactions costs. she doesn<t really mean that barter is impossible. ()iiii it is impossible for barter transactions to leave parties to an e9change better off. ()nnnn standardi:ation. Answer: Question Status: revious !dition )"" The conversion of a barter economy to one that uses money increases efficiency by reducing ()uuuu the need to e9change goods. ()++++ each of the above is true. Answer: Question Status: revious !dition .)hapter ( 6hat 3s /oney>  5" )1. Answer: Question Status: revious !dition )"( The conversion of a barter economy to one that uses money ()yyyy increases efficiency by reducing the need to e9change goods and services. ()rrrr money is used to facilitate e9changes. 6hen an economist states that barter is impossible. ()aaaaa increases efficiency by reducing transactions costs. ()**** barter is illegal. Answer: Question Status: 4ew )"1 The problem of the double coincidence of wants can be avoided if ()'''' trade is organi:ed in a central mar+et. ()hhhh barter has no useful place in today<s world. Ber real meaning is that ()gggg barter transactions are relatively costly. ():::: increases efficiency by reducing the need to speciali:e. ()oooo mutual respect. ()wwww the need to employ team production methods. ()ssss barter trades are encouraged. ()vvvv the need to speciali:e. ()bbbbb does not increase economic efficiency. ()tttt both (a) and (b) of the above. Answer: Question Status: Study 8uide )"? A problem with barter e9change is that barter re'uires ()llll a double coincidence of wants.

Answer: Question Status: revious !dition )"- 6hich of the following are true statements> ()hhhhh The conversion of a barter economy to one that uses money increases efficiency by increasing the cost of e9change. ()iiiii The conversion of a barter economy to one that uses money increases efficiency by increasing the cost to those who wish to speciali:e. Answer: Question Status: revious !dition )"5 6hich of the following are true statements> ()lllll The conversion of a barter economy to one that uses money increases efficiency by increasing the cost of e9change. Answer: Question Status: revious !dition . ()fffff All of the above are true. Answer: Question Status: revious !dition )". ()''''' increasing the cost of e9changing goods over time. Banking. ()ggggg @nly (a) and (c) of the above are true. Seventh !dition )"1 6hich of the following are true statements> ()ccccc The conversion of a barter economy to one that uses money increases efficiency by reducing the cost of e9change. ()eeeee The conversion of a barter economy to one that uses money increases efficiency by reducing transactions costs. ()mmmmm The conversion of a barter economy to one that uses money increases efficiency by reducing the cost to those who wish to speciali:e. ()+++++ All of the above are true. ()rrrrr raising the cost of e9change to those who would speciali:e.5(  #rederic S. /ish+in 0 Economics of Money. disadvantages of the barter system include: ()ppppp the re'uirement of a double coincidence of wants. and Financial Markets. ()***** The conversion of a barter economy to one that uses money increases efficiency by reducing transactions costs. ()ooooo All of the above are true. ()nnnnn The conversion of a barter economy to one that uses money does not increase economic efficiency. ()ddddd The conversion of a barter economy to one that uses money increases efficiency by reducing the cost to those who wish to speciali:e. ()sssss all of the above. 6hen compared to e9change systems that rely on money.

()vvvvv lowering the cost of e9change to those who would speciali:e. money ()cccccc encourages speciali:ation and the division of labor. 7ecause it is a medium of e9change. Answer: Question Status: revious !dition )(" 7ecause it is a medium of e9change. money ()hhhhhh discourages speciali:ation and the division of labor. ()::::: reduces transaction costs. disadvantages of the barter system include: ()ttttt the re'uirement of a double coincidence of wants. ()oooooo cannot be a durable asset. ()bbbbbb does only (a) and (b) of the above. money ()llllll does not earn interest. ()mmmmmm eliminates the re'uirement for a double coincidence of wants. ()****** is not allowed to earn interest. ()yyyyy encourages speciali:ation. ()nnnnnn must be currency. ()ffffff does all of the above. ()uuuuu lowering the cost of e9changing goods over time. ()gggggg does only (a) and (b) of the above. Answer: Question Status: revious !dition . ()eeeeee is not allowed to earn interest. money ()99999 eliminates the re'uirement for a double coincidence of wants. ()aaaaaa does all of the above. ()dddddd reduces transaction costs. ()iiiiii reduces transaction costs. Answer: Question Status: revious !dition )(? 7ecause it is a medium of e9change. Answer: Question Status: revious !dition )".)hapter ( 6hat 3s /oney>  51 )"= 6hen compared to e9change systems that rely on money. Answer: Question Status: revious !dition )(1 7ecause it is a medium of e9change. ()++++++ does only (b) and (c) of the above. ()wwwww all of the above.

()ccccccc 7ecause money lowers transaction costs.5-  #rederic S. ()uuuuuu encourages speciali:ation and the division of labor. ma+ing it easy to ascertain its value. ()yyyyyy /oney increases economic efficiency because it encourages speciali:ation. ()'''''' encourages speciali:ation and the division of labor. they mean that money ()pppppp reduces transactions costs. Seventh !dition )(( 6hen economists say that money promotes efficiency. and Financial Markets. ():::::: /oney increases economic efficiency because it increases transactions costs. ()ssssss does both (a) and (b) of the above. ()iiiiiii divisible into relatively small units. Banking. ()wwwwww does both (b) and (c) of the above. ()ddddddd 3ncome is a stoc+ variable. ()+++++++ only (a) and (b) of the above. Answer: Question Status: revious !dition )(- 6hich of the following statements best e9plains how the use of money in an economy increases economic efficiency> ()999999 /oney increases economic efficiency because it is costless to produce. ()aaaaaaa /oney cannot have an effect on economic efficiency. Answer: Question Status: revious !dition . ()rrrrrr is ine9pensive to produce. ()hhhhhhh widely accepted. ()vvvvvv is ine9pensive to produce. it promotes economic efficiency. /ish+in 0 Economics of Money. Answer: Question Status: revious !dition )(. Answer: Question Status: revious !dition )(1 6hen economists say that money promotes efficiency. ()eeeeeee All of the above are true. ()******* all of the above. they mean that money ()tttttt increases transactions costs. Answer: Question Status: revious !dition )(5 6hich of the following are true statements> ()bbbbbbb /oney lowers the costs spent trying to e9change goods and services. ()fffffff @nly (a) and (b) of the above are true. #or a commodity to function effectively as money it must be ()ggggggg easily standardi:ed.

Answer: Question Status: revious !dition )11 6hatever a society uses as money. ()yyyyyyy only (a) and (b) of the above. ma+ing it easy to ascertain its value. ()vvvvvvv barter e9change is economically inefficient. ()wwwwwww barter e9change cannot wor+ outside the family. 3f it is generally acceptable as a medium of e9change then it ()''''''' must be a commodity. implying that ()uuuuuuu the use of money is economically efficient. ()gggggggg be ine9pensive to produce. ()9999999 all of the above. Answer: Question Status: revious !dition )(. ()bbbbbbbb it must contain gold. ()nnnnnnn deteriorate 'uic+ly so that its supply does not become to large. ()sssssss is money. money must ()dddddddd be bac+ed in gold. ()cccccccc it must be produced by the government. ()ttttttt all of the above. ()mmmmmmm widely accepted. ()rrrrrrr must be a precious metal such as gold or silver. Answer: Question Status: revious !dition . ()ppppppp only (a) and (b) of the above. the distinguishing characteristic is that ()::::::: it must be completely inflation proof. Answer: Question Status: revious !dition )1" Although it can have a number of characteristics and serves more than one role.)hapter ( 6hat 3s /oney>  55 )(= #or a commodity to function effectively as money it must be ()lllllll easily standardi:ed. ()ffffffff be generally acceptable. ()aaaaaaaa it must be generally acceptable as payment for goods and services or in the repayment of debt. ()ooooooo all of the above. ()eeeeeeee have a nonmonetary value. Answer: Question Status: revious !dition )1? All but the most primitive societies use money as a medium of e9change.

()oooooooo transactions costs. ()99999999 contracting costs. ()tttttttt li'uidity costs. ()wwwwwwww transaction costs. /ish+in 0 Economics of Money. ()llllllll be both (a) and (c) of the above. Answer: Question Status: revious !dition )15 The time and resources spent trying to e9change goods and services are called ()vvvvvvvv bargaining costs. Answer: Question Status: revious !dition )1. and Financial Markets. ()bbbbbbbbb li'uidity costs. ()yyyyyyyy barter costs. ()pppppppp information costs. ()******** have a nonmonetary value. ()uuuuuuuu barter costs. ()nnnnnnnn barter costs.5. Answer: Question Status: Study 8uide )1- Although money facilitates e9change. Banking. ()'''''''' enforcement costs. ()ssssssss transaction costs. Seventh !dition )1( Although it can have a number of characteristics and serves more than one role. The costs of e9change are called ()rrrrrrrr mediumCofCe9change costs. ()ccccccccc barter costs. ()++++++++ be both (a) and (b) of the above. money must ()hhhhhhhh be ine9pensive to produce. Answer: Question Status: revious !dition )11 The resources used finding buyers or sellers and negotiating price and other terms are called ()mmmmmmmm pecuniary costs. Answer: Question Status: revious !dition . ()iiiiiiii be generally acceptable. ()aaaaaaaaa transaction costs.  #rederic S. e9change is still costly. !conomists say that money is productive because it reduces ():::::::: mediumCofCe9change costs.

/oney. ()iiiiiiiii efficiency. Answer: Question Status: revious !dition )-1 7ecause money reduces transaction costs. /oney. ()yyyyyyyyy does only (b) and (c) of the above. ()********* the division of labor. ()ggggggggg li'uidity costs are lower. ()ppppppppp competition. allowing people to speciali:e in what they do best. Answer: Question Status: revious !dition . it ()vvvvvvvvv promotes inefficiency by encouraging too many e9changes. ()fffffffff li'uidity costs are higher. ()nnnnnnnnn inefficiency. promotes ()hhhhhhhhh greed and avarice. ()ooooooooo the division of labor. Answer: Question Status: revious !dition )1. allowing people to speciali:e in what they do best. in a barter economy ()ddddddddd transaction costs are higher. promotes ()mmmmmmmmm greed and avarice. Answer: Question Status: revious !dition )-" 7ecause money reduces transaction costs. ()sssssssss favors production over e9change. ()eeeeeeeee transaction costs are lower. /oney reduces transactions costs. ()+++++++++ only (a) and (b) of the above. therefore.)hapter ( 6hat 3s /oney>  5= )1= )ompared to an economy that uses a medium of e9change. ()rrrrrrrrr promotes the division of labor. ()ttttttttt does all of the above. it ()''''''''' promotes efficiency. Answer: Question Status: revious !dition )-? /oney reduces transaction costs. ()uuuuuuuuu does only (a) and (b) of the above. ()wwwwwwwww promotes the division of labor. ()lllllllll only (b) and (c) of the above. ()999999999 favors productive activities over e9change activities. therefore.

()++++++++++ encourages speciali:ation and e9change. ()cccccccccc only (a) and (b) of the above. ()********** improves economic efficiency. ()aaaaaaaaaa improves economic efficiency. ()ffffffffffimproves economic efficiency. ()pppppppppp both (a) and (b) of the above. /oney. it ()iiiiiiiiii encourages greed and avarice.  #rederic S. therefore. Banking. and Financial Markets. ()uuuuuuuuuu paymentsCsystem ruler. Answer: Question Status: revious !dition )-. /ish+in 0 Economics of Money.5. ()tttttttttt store of value. money is said to function as a ()rrrrrrrrrrunit of account. Answer: Question Status: revious !dition . 6hen money prices are used to facilitate comparisons of value. ()hhhhhhhhhh only (a) and (b) of the above. ()ssssssssss medium of e9change. allowing people to speciali:e in what they do best. ()::::::::: encourages greed and avarice. ()llllllllll does only (a) and (b) of the above. ()gggggggggg frustrates e9change. ()dddddddddd only (b) and (c) of the above. ()'''''''''' neither (a) nor (b) of the above. allowing people to speciali:e in what they do best. ()oooooooooo people generally prefer using it in e9changes. ()bbbbbbbbbb frustrates e9change. ()eeeeeeeeee decreases speciali:ation. Answer: Question Status: revious !dition )-5 @ne can be confident that money must promote efficiency because ()nnnnnnnnnn almost every society e9cept the most primitive uses it. therefore. Seventh !dition )-( /oney reduces transaction costs. /oney. Answer: Question Status: revious !dition )-1 /oney reduces transaction costs. ()mmmmmmmmmm does only (b) and (c) of the above. Answer: Question Status: revious !dition )-- 7ecause money reduces transaction costs.

()+++++++++++ 4(4/"). ()nnnnnnnnnnn "? ()ooooooooooo "()ppppppppppp (? ()''''''''''' 1Answer: Question Status: revious !dition . Answer: Question Status: revious !dition )5" 3f there are five goods in a barter economy. there are ten goods in a barter economy. Answer: Question Status: 4ew )51 3n a barter economy the number of prices in an economy with 4 goods is ()*********** D4(4 − 1)E/". then one needs to +now FFFFF prices in order to e9change one good for another. ()wwwwwwwwww reduces the number of prices that need to be calculated. ()yyyyyyyyyy does all of the above. ()ccccccccccc does not earn interest. Answer: Question Status: revious !dition )5? A problem with barter e9change when there are many goods is that in a barter system ()eeeeeeeeeee transactions costs are minimi:ed. ()ddddddddddd does all of the above. ()lllllllllll "4. one needs to +now ten prices in order to e9change one good for another. ()fffffffffff there e9ists a multiple number of prices for each good. ():::::::::: does only (a) and (b) of the above. however. ()9999999999 does not earn interest. ()iiiiiiiiiii there is only one store of value. money ()vvvvvvvvvv reduces transaction costs. Answer: Question Status: revious !dition )-. money ()aaaaaaaaaaa increases transaction costs. ()mmmmmmmmmmm 4(4/") − 1. ()ggggggggggg everyone is overspeciali:ed. ()hhhhhhhhhhh e9change of services is impossible.)hapter ( 6hat 3s /oney>  .? )-= 7ecause it is a unit of account. 3f. ()bbbbbbbbbbb reduces the number of prices that need to be calculated. 7ecause it is a unit of account.

()dddddddddddd 5 ()eeeeeeeeeeee . however. one needs to +now ten prices in order to e9change one good for another. however. one needs to +now three prices in order to e9change one good for another. then one needs to +now FFFFF prices in order to e9change one good for another.1  #rederic S. ()vvvvvvvvvvv 1 ()wwwwwwwwwww ()99999999999 5 ()yyyyyyyyyyy = Answer: Question Status: revious !dition )5- 3f there are four goods in a barter economy. there are four goods in a barter economy. ()hhhhhhhhhhhh 1()iiiiiiiiiiii1" ()************. one needs to +now ten prices in order to e9change one good for another. ()::::::::::: = ()aaaaaaaaaaaa 5 ()bbbbbbbbbbbb ()cccccccccccc 1 Answer: Question Status: revious !dition )55 3f there are five goods in a barter economy. Banking. 3f. there are si9 goods in a barter economy. 3f. then one needs to +now FFFFF prices in order to e9change one good for another. there are ten goods in a barter economy. one needs to +now three prices in order to e9change one good for another. however. then one needs to +now FFFFF prices in order to e9change one good for another. /ish+in 0 Economics of Money. ()ffffffffffff 1" ()gggggggggggg 1Answer: Question Status: revious !dition )5. then one needs to +now FFFFF prices in order to e9change one good for another. ()++++++++++++ 5 Answer: Question Status: revious !dition . ()rrrrrrrrrrr 1? ()sssssssssss 1()ttttttttttt (? ()uuuuuuuuuuu 1Answer: Question Status: revious !dition )51 3f there are five goods in a barter economy. there are si9 goods in a barter economy. 3f. and Financial Markets. then one needs to +now FFFFF prices in order to e9change one good for another.. 3f. however. 3f there are three goods in a barter economy. Seventh !dition )5( 3f there are three goods in a barter economy.

one needs to +now three prices in order to e9change one good for another. then one needs to +now FFFFF prices in order to e9change one good for another. 3f. ()ddddddddddddd it is the most li'uid asset. ()ccccccccccccc its value remains fi9ed to the price levelA that is. ()nnnnnnnnnnnn 1? ()oooooooooooo 1" Answer: Question Status: revious !dition )5. ()eeeeeeeeeeeee of all of the above. ()yyyyyyyyyyyy cannot be a durable asset.)hapter ( 6hat 3s /oney>  . if prices double so does the value of money." Although not a uni'ue store of value. then one needs to +now FFFFF prices in order to e9change one good for another. ():::::::::::: must be currency. there are five goods in a barter economy. people find money a convenient store of value because ()bbbbbbbbbbbbb it does not decline in value when prices rise. ()aaaaaaaaaaaaa is none of the above. ()pppppppppppp ()'''''''''''' 5 ()rrrrrrrrrrrr = ()ssssssssssss 1? Answer: Question Status: revious !dition ). there are five goods in a barter economy. Answer: Question Status: revious !dition ." )5= 3f there are four goods in a barter economy. one needs to +now si9 prices in order to e9change one good for another.? 6hich of the following assets can serve as a store of value> ()tttttttttttt/oney ()uuuuuuuuuuuu Stoc+s and bonds ()vvvvvvvvvvvv Bouses ()wwwwwwwwwwww All of the above Answer: Question Status: revious !dition ). ()fffffffffffff of none of the above. 3f. however. money ()999999999999 does not earn interest. Answer: G Question Status: revious !dition ). ()llllllllllll= ()mmmmmmmmmmmm . 3f there are three goods in a barter economy. however.1 7ecause it is a store of value.

()+++++++++++++ more fungible. the correct order is ()aaaaaaaaaaaaaa savings depositsA corporate bondA swimming pool.(  #rederic S. /ish+in 0 Economics of Money. Answer: Question Status: 4ew ).. ()iiiiiiiiiiiii less li'uid. ()************* more moneyli+e.5 $an+ing assets from most li'uid to least li'uid. Answer: Question Status: 4ew ). ()ooooooooooooo traveler<s chec+s. Banking.( 3ncreasing transactions costs of selling an asset ma+e the asset ()ggggggggggggg more valuable. the correct order is ()vvvvvvvvvvvvv savings bondsA houseA currency. ()cccccccccccccc corporate bondA savings depositsA swimming pool. ()uuuuuuuuuuuuu stoc+s. ()mmmmmmmmmmmmm corporate 7onds.1 @f the following assets. the most li'uid is ()lllllllllllll savings bonds. ()bbbbbbbbbbbbbb swimming poolA savings depositsA corporate bond. ()eeeeeeeeeeeeee savings depositsA swimming poolA corporate bonds.. ()wwwwwwwwwwwww currencyA savings bondsA house.- @f the following assets. ()nnnnnnnnnnnnn stoc+s. ()hhhhhhhhhhhhh more li'uid. Seventh !dition ). ()dddddddddddddd swimming poolA corporate bondsA savings deposits. Answer: Question Status: Study 8uide ). ()sssssssssssss chec+ing deposits. ()9999999999999 currencyA houseA savings bonds. Answer: Question Status: 4ew . ()yyyyyyyyyyyyy houseA savings bondsA currency. ()ttttttttttttt a house. ()ppppppppppppp certificates of deposit. Answer: Question Status: 4ew ). and Financial Markets. ()::::::::::::: houseA currencyA savings bonds. $an+ing assets from most li'uid to least li'uid. ()rrrrrrrrrrrrr traveler<s chec+s. the least li'uid is ()''''''''''''' currency.

()ssssssssssssss all of the above. ()iiiiiiiiiiiiii all of the above. but ()ffffffffffffff are not generally accepted in the payment for goods and services.1 ). ()yyyyyyyyyyyyyy falls by 1??H. )hec+able deposits are money because ()++++++++++++++ federal regulations mandate that they be so considered. can issue chec+able deposits. ()hhhhhhhhhhhhhh are not considered as wealth. ()wwwwwwwwwwwwww falls by -? percent. ()rrrrrrrrrrrrrr the only thing accepted in economic e9change. Answer: Question Status: revious !dition )=? eople hold money even during inflationary episodes when other assets prove to be better stores of value. and not savings and loan associations. ()mmmmmmmmmmmmmm only ban+s. ()'''''''''''''' a uni'ue good for which there are no substitutes. ()vvvvvvvvvvvvvv rises but does not double. ()llllllllllllll they serve the functions of money. cars. the value of money ()tttttttttttttt doubles. or houses function as stores of value. land.)hapter ( 6hat 3s /oney>  . ():::::::::::::: remains unchanged. common stoc+. Answer: Question Status: revious !dition ). Answer: Question Status: revious !dition )=1 3f the price level doubles. ()************** only (a) and (b) of the above. Answer: Question Status: 4ew . ()uuuuuuuuuuuuuu more than doubles. ()aaaaaaaaaaaaaaarises by -?H. ()gggggggggggggg do not generate flows of income for their owners.= Assets such as bonds. furniture. ()nnnnnnnnnnnnnn of both (a) and (b) of the above. due to diminishing returns. ()bbbbbbbbbbbbbbb doubles. This can be e9plained by the fact that money is ()pppppppppppppp e9tremely li'uid. art. ()oooooooooooooo of both (a) and (c) of the above. Answer: Question Status: revious !dition )=" 3f the level of prices falls by -? percent.. the value of money ()99999999999999 falls by -?H. due to scale economies.

()mmmmmmmmmmmmmmm money no longer functions as a good store of value and the volume of barter transactions increases. ()iiiiiiiiiiiiiii money no longer functions as a good store of value and people may resort to barter transactions on a much larger scale. ()ggggggggggggggg is impossible. ()ddddddddddddddd has an uncertain effect on the value of money. ()rrrrrrrrrrrrrrr money fails to serve as a medium of e9change. Answer: Question Status: revious !dition . Answer: Question Status: revious !dition )=. ()*************** middleCclass savers benefit as prices rise. ()wwwwwwwwwwwwwww all of the above. ()eeeeeeeeeeeeeeeincreases the value of money. then one can probably infer that ()ttttttttttttttt inflation has accelerated into hyperinflation. Answer: Question Status: revious !dition )=- Guring hyperinflations. ()+++++++++++++++ all of the above occur. ()nnnnnnnnnnnnnnn debtors benefit as the real value of their debt falls. ()fffffffffffffff reduces the value of money. ()ooooooooooooooo all of the above occur.-  #rederic S. 3f one observes a decline in the use of money to carry out transactions and an increase in barter e9changes. ()sssssssssssssss money fails to serve as a standard of value. ()vvvvvvvvvvvvvvv the use of money no longer significantly reduces transaction costs. Banking. ()uuuuuuuuuuuuuuu money no longer serves as a store of value. ()lllllllllllllll the value of money falls rapidly. Answer: Question Status: 4ew )=1 Guring hyperinflations. ()''''''''''''''' money fails to serve as a unit of account. and Financial Markets. Answer: Question Status: revious !dition )=5 Guring periods of rapidly rising prices ()ppppppppppppppp money fails to serve as a good store of value. ()999999999999999 only (a) and (b) of the above.. ()hhhhhhhhhhhhhhh the value of money rises rapidly. Seventh !dition )=( A fall in the level of prices ()cccccccccccccccdoes not affect the value of money. /ish+in 0 Economics of Money.

? 3f merchants in the country Ied choose to close their doors." 3f merchants in the country Ied choose to close their doors. ()eeeeeeeeeeeeeeee hyperinflation. ()rrrrrrrrrrrrrrrr all of the above. Answer: Question Status: revious !dition ). 7ecause inflation in 4icaragua in 1. ()iiiiiiiiiiiiiiii disinflation. ()bbbbbbbbbbbbbbbb all of the above.1 3f currency in the country of Ied is seen as worthless by its citi:ens. the country suffers ()yyyyyyyyyyyyyyy deflation. ()nnnnnnnnnnnnnnnn hyperinflation. one can conclude that the 4icaraguan economy suffered from ()cccccccccccccccc deflation. ()ffffffffffffffff superdeflation. ()mmmmmmmmmmmmmmmm disinflation. ()dddddddddddddddd disinflation.5 )== 6hen prices in a particular country rise e9tremely rapidly. ()**************** hyperinflation. preferring to be stuc+ with rotting merchandise rather than worthless currency. then one can conclude that Ied is e9periencing a ()gggggggggggggggg superdeflation. ()hhhhhhhhhhhhhhhh hyperdeflation. ()'''''''''''''''' being heavily counterfeited. preferring to be stuc+ with rotting merchandise rather than worthless currency. then Ied is probably e9periencing a ()++++++++++++++++ superdeflation.)hapter ( 6hat 3s /oney>  . Answer: Question Status: revious !dition ). ():::::::::::::::disinflation. ()aaaaaaaaaaaaaaaa hyperinflation. ()llllllllllllllll hyperdeflation.? topped 1(. Answer: Question Status: revious !dition .. Answer: Question Status: revious !dition )=. ()ssssssssssssssss none of the above.??? percent. ()pppppppppppppppp scarce relative to goods. Answer: Question Status: revious !dition ). then one can conclude that money in Ied is ()oooooooooooooooo a poor store of value.

()mmmmmmmmmmmmmmmmm only (a) and (b) of the above.- As the payments system evolves from barter to a monetary system.. ()uuuuuuuuuuuuuuuu can be 'uite e9pensive to transport because of their bul+.( )ompared to chec+s. ()9999999999999999 only (a) and (b) of the above. ():::::::::::::::: printing reaches a sufficiently advanced stage that counterfeiting becomes e9tremely difficult. ()bbbbbbbbbbbbbbbbb all of the above occur. Answer: Question Status: revious !dition ). Seventh !dition ). ()vvvvvvvvvvvvvvvv are not the most li'uid assets. Answer: Question Status: revious !dition . increasing significantly the transportation costs of commodity money. ()eeeeeeeeeeeeeeeee transaction costs decline.  #rederic S.1 As a payments system evolves from barter to a monetary system. ()fffffffffffffffff the number of prices that need to be calculated increase rather dramatically. paper currency and coins have the ma*or drawbac+s that they ()tttttttttttttttt are easily stolen. ()lllllllllllllllll all of the above. ()hhhhhhhhhhhhhhhhh only (a) and (b) of the above.5 As the payments system evolves from barter to a monetary system. Answer: Question Status: revious !dition ). ()aaaaaaaaaaaaaaaaa large purchases. ()iiiiiiiiiiiiiiiii commodity money is li+ely to precede the use of paper currency. ()wwwwwwwwwwwwwwww all of the above. ()+++++++++++++++++ the number of prices that need to be calculated decrease. Answer: Question Status: revious !dition ). Banking.. ()ccccccccccccccccc only (a) and (b) of the above occur. become more prevalent. paper currency will replace commodity money when ()yyyyyyyyyyyyyyyy trade e9pands over a larger region. /ish+in 0 Economics of Money. ()ggggggggggggggggg all of the above. ()***************** transactions costs decline. such as automobiles and houses. and Financial Markets. ()ddddddddddddddddd commodity money is li+ely to precede the use of paper currency.

.= ). ()::::::::::::::::: the fact that precious metals were difficult to carry and transport. ()ppppppppppppppppp innovations that reduced the costs of e9changing goods and services.. ()yyyyyyyyyyyyyyyyy the fact that precious metals were not generally acceptable. ()wwwwwwwwwwwwwwwww only (b) and (c) of the above. has the advantage of being lighter than coins. then to chec+s can best be understood as a conse'uence of ()99999999999999999 innovations that allowed individuals to escape oppressive ta9es. and being durable. then to chec+s can best be understood as a conse'uence of ()nnnnnnnnnnnnnnnnn government regulations designed to improve the efficiency of the payments system. Answer: Question Status: revious !dition . ()bbbbbbbbbbbbbbbbbb the fact that paper more costly to produce than precious metals. but had the disadvantage of being difficult to carry and transport from one place to another. paper money that the government ma+es legal tender. ()''''''''''''''''' all of the above. then to fiat money. Answer: Question Status: revious !dition ). being divisible into relatively small units. ()ffffffffffffffffff All of the above are true. Answer: Question Status: Study 8uide )1?? 6hich of the following are true about the evolution of the payments system> ()cccccccccccccccccc The evolution of the payments system from barter to precious metals. The evolution of the payments system from barter to precious metals. then to chec+s can best be understood as a conse'uence of innovations that reduced the costs of e9changing goods and services. Answer: Question Status: revious !dition ).)hapter ( 6hat 3s /oney>  . ()dddddddddddddddddd recious metals had the advantage of being widely accepted. yet it can still be costly to transport because of its bul+. ()aaaaaaaaaaaaaaaaaa the fact that paper money is less accepted than chec+s. ()ttttttttttttttttt competition among firms to ma+e it easier for customers to purchase their products. then to fiat money. ()ooooooooooooooooo government regulations designed to promote the safety of the payments system. ()rrrrrrrrrrrrrrrrr only (a) and (c) of the above. then to fiat money. ()uuuuuuuuuuuuuuuuu innovations that reduced the costs of e9changing goods and services. The evolution of the payments system from barter to precious metals. ()eeeeeeeeeeeeeeeeee #iat money. then to chec+s can best be understood as a conse'uence of ()sssssssssssssssssgovernment regulations designed to improve the efficiency of the payments system. ()vvvvvvvvvvvvvvvvv all of the above.= The evolution of the payments system from barter to precious metals. then to fiat money.

():::::::::::::::::: legal liability is more clearly defined. paper currency. Banking. chec+s. electronic funds transfers. ()nnnnnnnnnnnnnnnnnn all of the above are true. ()pppppppppppppppppp chec+s reduce the incidence of fraud. chec+s are not li+ely to be eliminated soon because ()oooooooooooooooooo people want paper receipts. chec+s. ()yyyyyyyyyyyyyyyyyy transfers of funds are completed instantaneously. paper currency. ()iiiiiiiiiiiiiiiiii 7arter. ()vvvvvvvvvvvvvvvvvv commodity monies. an !#TS system has the advantage that ()999999999999999999 transfers of funds are less costly. tends to drive out paper money. Answer: Question Status: $evised )1?( !ven with the spread of electronic funds transfer systems (!#TS) to more users. ()aaaaaaaaaaaaaaaaaaa only (a) and (b) of the above. Seventh !dition )1?1 6hich of the following se'uences accurately describes the evolution of the payments system> ()gggggggggggggggggg 7arter. Answer: Question Status: revious !dition . electronic funds transfers. paper currency. ()****************** 7arter. /ish+in 0 Economics of Money. Answer: Question Status: revious !dition )1?" 3n e9plaining the evolution of money ()++++++++++++++++++ government regulation is the most important factor. electronic funds transfers. ()uuuuuuuuuuuuuuuuuu electronic fund transfers. paper currency. electronic funds transfers. coins made of precious metals.. coins made of precious metals. ()llllllllllllllllll commodity money. ()rrrrrrrrrrrrrrrrrr of all of the above.  #rederic S.)ompared to a payment system based on chec+s. ()'''''''''''''''''' ban+s are unli+ely to install the necessary electronic facilities. chec+s. ()ssssssssssssssssss of both (a) and (b) of the above. because it is valued more highly.. chec+s. coins made of precious metals. Answer: Question Status: revious !dition )1?. Answer: Question Status: revious !dition )1?1 Guring the past two decades an important characteristic of the modern payments system has been the rapidly increasing use of ()tttttttttttttttttt chec+s and decreasing use of currency. ()hhhhhhhhhhhhhhhhhh 7arter. ()wwwwwwwwwwwwwwwwww all of the above. ()mmmmmmmmmmmmmmmmmm new forms of money evolve to lower transaction costs. and Financial Markets.

a payments system based on chec+s has the ma*or drawbac+ that ()bbbbbbbbbbbbbbbbbbb chec+s are more costly to process. ()iiiiiiiiiiiiiiiiiii )hec+s ta+e time to move through the chec+Cclearing system. ()+++++++++++++++++++ @nly (a) and (b) of the above. ()nnnnnnnnnnnnnnnnnnn savings deposits. ()ppppppppppppppppppp savings bonds. Answer: Question Status: 4ew )1?. Answer: Question Status: revious !dition )1?. ()ddddddddddddddddddd fraud may be more difficult to commit when paper receipts are eliminated. ()ooooooooooooooooooo certificates of deposit. ()eeeeeeeeeeeeeeeeeee all of the above. meaning that it may ta+e several days before the depositor can get her cash. ()******************* All of the above. 6hich of the following forms of electronic money is a substitute for cash> ()''''''''''''''''''' a debit card ()rrrrrrrrrrrrrrrrrrr a storedCvalue card ()sssssssssssssssssss a smart card ()ttttttttttttttttttt all of the above ()uuuuuuuuuuuuuuuuuuu only (b) and (c) of the above Answer: Question Status: 4ew )11? 6hich of the following forms of electronic money is not a substitute for cash> ()vvvvvvvvvvvvvvvvvvv a debit card ()wwwwwwwwwwwwwwwwwww a credit card ()9999999999999999999 a storedCvalue card ()yyyyyyyyyyyyyyyyyyy a smart card ()::::::::::::::::::: all of the above Answer: Question Status: 4ew . Answer: Question Status: Study 8uide )1?= A smart card is the e'uivalent of ()lllllllllllllllllll cash. ()hhhhhhhhhhhhhhhhhhh )hec+s are costly to transport.)hapter ( 6hat 3s /oney>  =? )1?5 )ompared to an !#TS system. ()fffffffffffffffffff both (a) and (b) of the above. A payments system based primarily on chec+s has the following disadvantages: ()ggggggggggggggggggg )hec+s are costly to process. ()ccccccccccccccccccc chec+s ta+e longer to process. ()mmmmmmmmmmmmmmmmmmm chec+s.

. were ()aaaaaaaaaaaaaaaaaaaa fi9ed permanently to the euro. Answer: Question Status: revious !dition )111 Advocates of monetary union claim that the adoption of a common currency by 8ermany in 1. ()++++++++++++++++++++ ma+ing !ast 8ermany<s good cheaper for 6est 8erman citi:ens. ()llllllllllllllllllll all of the above. ()mmmmmmmmmmmmmmmmmmmm both (a) and (b) of the above.1 /aastrict Treaty of !uropean Jnion. Seventh !dition )111 As part of the Gecember 1. ()ffffffffffffffffffff delaying the economic integration of !uropean countries.. Banking.. Answer: Question Status: revious !dition . ()gggggggggggggggggggg allowing member countries to repudiate their government debts.=1  #rederic S.. /ish+in 0 Economics of Money.. and Financial Markets. ()bbbbbbbbbbbbbbbbbbbb allowed to float for the ne9t si9 months before being fi9ed permanently to the euro. ()oooooooooooooooooooo slowing the economic integration of the two countries. ()******************** hastening the economic integration of the two countries. Answer: Question Status: $evised )11" Advocates of the !uropean monetary union point to the advantages that a single currency has in ()eeeeeeeeeeeeeeeeeeee eliminating the transaction costs involved in having to e9change the currency of one country for the currency of another. starting Kanuary 1. ()dddddddddddddddddddd allowed to float permanently against the euro. ()cccccccccccccccccccc allowed to float for the ne9t year before being fi9ed permanently to the euro. ()pppppppppppppppppppp ma+ing !ast 8ermany<s good cheaper for 6est 8erman citi:ens.? had the advantages of ()nnnnnnnnnnnnnnnnnnnn eliminating the transaction costs of e9changing the currencies of !ast and 6est 8ermany. Answer: Question Status: revious !dition )11( Advocates of monetary union claim that the adoption of a common currency by 8ermany in 1. ()rrrrrrrrrrrrrrrrrrrr both (a) and (b) of the above. thereby allowing !ast 8erman citi:ens time to ad*ust to capitalism.? had the advantages of ()iiiiiiiiiiiiiiiiiiii eliminating the transaction costs of e9changing the currencies of !ast and 6est 8ermany. 1. ()'''''''''''''''''''' all of the above. the e9change rates of countries entering the monetary union. ()hhhhhhhhhhhhhhhhhhhh doing all of the above..

()eeeeeeeeeeeeeeeeeeeee /(. Answer: Question Status: revious !dition )11= Today. since the #ed no longer +nows what to consider money. ()tttttttttttttttttttt more difficult.)hapter ( 6hat 3s /oney>  =" )11. ()wwwwwwwwwwwwwwwwwwww lessA 'uic+ens ()99999999999999999999 moreA 'uic+ens ()yyyyyyyyyyyyyyyyyyyy moreA slows ():::::::::::::::::::: moreA stops ()aaaaaaaaaaaaaaaaaaaaa none of the above Answer: Question Status: Study 8uide )11. since the #ed now +nows what to consider money. ()iiiiiiiiiiiiiiiiiiiii savings bonds. The narrowest measure of money that the #ed reports is ()bbbbbbbbbbbbbbbbbbbbb /?. ()vvvvvvvvvvvvvvvvvvvv more difficult. Answer: Question Status: revious !dition )11. ()hhhhhhhhhhhhhhhhhhhhh chec+able deposits. 6hich of the following is not included in the measure of /1> ()********************* 4@6 accounts ()+++++++++++++++++++++ Gemand deposits ()lllllllllllllllllllll )urrency ()mmmmmmmmmmmmmmmmmmmmm $epurchase agreements Answer: Question Status: revious !dition )1"? 6hich of the following is not included in the measure of /1> ()nnnnnnnnnnnnnnnnnnnnn Traveler<s chec+s ()ooooooooooooooooooooo Gemand deposits ()ppppppppppppppppppppp )urrency ()''''''''''''''''''''' 8old coins issued by the J. Treasury Answer: . since the #ed no longer +nows what to consider money. ()ggggggggggggggggggggg currency and coins. ()ddddddddddddddddddddd /". ()uuuuuuuuuuuuuuuuuuuu easier. most money in the Jnited States is in the form of ()fffffffffffffffffffff currency. since the #ed now +nows what to consider money. Answer: Question Status: revious !dition )115 Gefining money becomes FFFFFFF difficult as the pace of financial innovation FFFFFFFF.S.$ecent financial innovation ma+es the #ederal $eserve<s *ob of conducting monetary policy ()ssssssssssssssssssss easier. ()ccccccccccccccccccccc /1.

Banking.6hich of the following is not included in the monetary aggregate /"> ()********************** )urrency ()++++++++++++++++++++++ /oney mar+et deposit accounts ()llllllllllllllllllllll Traveler<s chec+s ()mmmmmmmmmmmmmmmmmmmmmm )hec+ing deposits ()nnnnnnnnnnnnnnnnnnnnnn Savings bonds Answer: Question Status: Study 8uide . Answer: Question Status: revious !dition )1"1 The /1 measure of money includes ()eeeeeeeeeeeeeeeeeeeeee small denomination time deposits. /1 money supply are demand and chec+able deposits plus ()rrrrrrrrrrrrrrrrrrrrr currency. ()uuuuuuuuuuuuuuuuuuuuu currency plus travelers chec+s plus money mar+et deposits. ()ttttttttttttttttttttt currency plus travelers chec+s. Answer: Question Status: revious !dition )1"" The /1 measure of money includes ()vvvvvvvvvvvvvvvvvvvvv small denomination time deposits. ()999999999999999999999 money mar+et mutual fund shares.S. ()aaaaaaaaaaaaaaaaaaaaaa savings deposits. ()wwwwwwwwwwwwwwwwwwwww money mar+et deposit accounts. /ish+in 0 Economics of Money. Seventh !dition Question Status: revious !dition )1"1 The components of the J. ()ffffffffffffffffffffff savings deposits. ()yyyyyyyyyyyyyyyyyyyyy demand deposits. ()hhhhhhhhhhhhhhhhhhhhhh money mar+et mutual fund shares. ()dddddddddddddddddddddd traveler<s chec+s. Answer: Question Status: revious !dition )1". ()bbbbbbbbbbbbbbbbbbbbbb money mar+et deposit accounts. and Financial Markets. Answer: Question Status: revious !dition )1"( The /1 measure of money includes ()::::::::::::::::::::: small denomination time deposits. ()gggggggggggggggggggggg money mar+et deposit accounts. ()cccccccccccccccccccccc money mar+et mutual fund shares.=(  #rederic S. ()iiiiiiiiiiiiiiiiiiiiii currency. ()sssssssssssssssssssss currency plus savings deposits.

6hich of the following is not included in the /" measure of money but is included in the /1 measure of money> ()ccccccccccccccccccccccc )urrency ()ddddddddddddddddddddddd Gemand deposits ()eeeeeeeeeeeeeeeeeeeeeee Traveler<s chec+s ()fffffffffffffffffffffff @ther chec+able deposits ()ggggggggggggggggggggggg 4one of the above Answer: Question Status: revious !dition )1(? 6hich of the following is not included in the /" measure of money but is included in the /1 measure of money> ()hhhhhhhhhhhhhhhhhhhhhhh Small denomination time deposits ()iiiiiiiiiiiiiiiiiiiiiii Savings deposits ()*********************** )hec+able deposits ()+++++++++++++++++++++++ All of the above ()lllllllllllllllllllllll 4one of the above Answer: Question Status: revious !dition .S.)hapter ( 6hat 3s /oney>  =1 )1"5 6hich of the following is included in /" but not in /1> ()oooooooooooooooooooooo 4@6 accounts ()pppppppppppppppppppppp Gemand deposits ()'''''''''''''''''''''' )urrency ()rrrrrrrrrrrrrrrrrrrrrr /oney mar+et mutual fund shares (noninstitutional) ()ssssssssssssssssssssss 8old coins issued by the J. Treasury Answer: Question Status: revious !dition )1". 6hich of the following is included in /" but not in /1> ()tttttttttttttttttttttt 4@6 accounts ()uuuuuuuuuuuuuuuuuuuuuu /oney mar+et deposit accounts ()vvvvvvvvvvvvvvvvvvvvvv Gemand deposits ()wwwwwwwwwwwwwwwwwwwwww Traveler<s chec+s Answer: Question Status: $evised )1"= 6hich of the following is included in the /1 measure of money but is not included in the /" measure of money> ()9999999999999999999999 )urrency ()yyyyyyyyyyyyyyyyyyyyyy )hec+able deposits ():::::::::::::::::::::: Traveler<s chec+s ()aaaaaaaaaaaaaaaaaaaaaaa All of the above ()bbbbbbbbbbbbbbbbbbbbbbb 4one of the above Answer: Question Status: revious !dition )1".

/". /(.3f an individual redeems a J. /1.S. Answer: Question Status: Study 8uide currency. chec+ing deposits. savings bond for currency ()eeeeeeeeeeeeeeeeeeeeeeee /1 stays the same and /" decreases. ()hhhhhhhhhhhhhhhhhhhhhhhh /1 stays the same and /" stays the same.=-  #rederic S. ()gggggggggggggggggggggggg /1 increases and /" stays the same. . ()ffffffffffffffffffffffff /1 increases and /" decreases. /ish+in 0 Economics of Money. and Financial Markets. Banking. ()iiiiiiiiiiiiiiiiiiiiiiii /1 increases and /" increases. the largest is ()::::::::::::::::::::::: ()aaaaaaaaaaaaaaaaaaaaaaaa ()bbbbbbbbbbbbbbbbbbbbbbbb ()cccccccccccccccccccccccc ()dddddddddddddddddddddddd Answer: Question Status: 4ew )1(. Seventh !dition )1(1 6hich of the following is not included in the /1 measure of money but is included in the /" measure of money> ()mmmmmmmmmmmmmmmmmmmmmmm )urrency ()nnnnnnnnnnnnnnnnnnnnnnn Traveler<s chec+s ()ooooooooooooooooooooooo Gemand deposits ()ppppppppppppppppppppppp Small denomination time deposits Answer: Question Status: revious !dition )1(" 6hich of the following is not included in the /1 measure of money but is included in the /" measure of money> ()''''''''''''''''''''''' Savings deposits ()rrrrrrrrrrrrrrrrrrrrrrr Gemand deposits ()sssssssssssssssssssssss Traveler<s chec+s ()ttttttttttttttttttttttt @ther chec+able deposits Answer: Question Status: revious !dition )1(( 6hich of the following is included in both /1 and /"> ()uuuuuuuuuuuuuuuuuuuuuuu )urrency ()vvvvvvvvvvvvvvvvvvvvvvv Savings deposits ()wwwwwwwwwwwwwwwwwwwwwww Small time deposits ()99999999999999999999999 /oney mar+et deposit accounts ()yyyyyyyyyyyyyyyyyyyyyyy Savings bonds Answer: Question Status: 4ew )1(1 @f the following.

()rrrrrrrrrrrrrrrrrrrrrrrr /1 increases and /" stays the same. Answer: Question Status: revious !dition . ()pppppppppppppppppppppppp /1 stays the same and /" stays the same. ()uuuuuuuuuuuuuuuuuuuuuuuu /1 increases and /" decreases. 3f an individual moves money from a demand deposit account to a smallCdenomination time deposit account. ()999999999999999999999999 /1 stays the same and /" stays the same. ()wwwwwwwwwwwwwwwwwwwwwwww /1 stays the same and /" increases. ()llllllllllllllllllllllll /1 stays the same and /" stays the same. ()nnnnnnnnnnnnnnnnnnnnnnnn /1 decreases and /" stays the same. ()************************ /1 increases and /" stays the same. ()ccccccccccccccccccccccccc /1 increases and /" decreases. 3f an individual moves money from a demand deposit account to a money mar+et deposit account. Answer: Question Status: revious !dition )11? 3f an individual moves money from a smallCdenomination time deposit to a savings deposit account. ()ssssssssssssssssssssssss /1 stays the same and /" increases. ()mmmmmmmmmmmmmmmmmmmmmmmm /1 increases and /" decreases. ():::::::::::::::::::::::: /1 increases and /" stays the same. ()aaaaaaaaaaaaaaaaaaaaaaaaa /1 stays the same and /" increases. ()vvvvvvvvvvvvvvvvvvvvvvvv /1 decreases and /" stays the same. Answer: Question Status: revious !dition )1(.)hapter ( 6hat 3s /oney>  =5 )1(5 3f an individual moves money from a smallCdenomination time deposit to a demand deposit account. ()bbbbbbbbbbbbbbbbbbbbbbbbb /1 stays the same and /" stays the same. Answer: Question Status: revious !dition )1(. ()yyyyyyyyyyyyyyyyyyyyyyyy /1 increases and /" decreases. ()'''''''''''''''''''''''' /1 increases and /" decreases. ()tttttttttttttttttttttttt /1 stays the same and /" stays the same. ()++++++++++++++++++++++++ /1 stays the same and /" increases. ()oooooooooooooooooooooooo /1 stays the same and /" increases. Answer: Question Status: revious !dition )1(= 3f an individual moves money from a smallCdenomination time deposit to a money mar+et deposit account.

3f an individual moves money from currency to a demand deposit account. ()sssssssssssssssssssssssss /1 increases and /" decreases. ()hhhhhhhhhhhhhhhhhhhhhhhhh /1 decreases and /" stays the same. ()wwwwwwwwwwwwwwwwwwwwwwwww /1 increases and /" stays the same. ()************************* /1 stays the same and /" stays the same. Answer: Question Status: revious !dition )11. ()lllllllllllllllllllllllll /1 increases and /" stays the same. ()+++++++++++++++++++++++++ /1 increases and /" stays the same. ()ggggggggggggggggggggggggg /1 increases and /" decreases. Answer: Question Status: revious !dition )11" 3f an individual moves money from a money mar+et deposit account to a demand deposit account. ()eeeeeeeeeeeeeeeeeeeeeeeee /1 stays the same and /" increases.=. ()rrrrrrrrrrrrrrrrrrrrrrrrr /1 stays the same and /" stays the same. ()mmmmmmmmmmmmmmmmmmmmmmmmm /1 stays the same and /" increases. /ish+in 0 Economics of Money. Seventh !dition )111 3f an individual moves money from a savings deposit account to a money mar+et deposit account. Answer: Question Status: revious !dition )11( 3f an individual moves money from a (noninstitutional) money mar+et mutual fund to a savings deposit account. Answer: Question Status: revious !dition )111 3f an individual moves money from currency to a money mar+et deposit account. ()''''''''''''''''''''''''' /1 stays the same and /" increases. ()vvvvvvvvvvvvvvvvvvvvvvvvv /1 stays the same and /" stays the same. Answer: Question Status: revious !dition . ()iiiiiiiiiiiiiiiiiiiiiiiii /1 stays the same and /" increases. ()ttttttttttttttttttttttttt /1 decreases and /" stays the same.  #rederic S. Banking. and Financial Markets. ()uuuuuuuuuuuuuuuuuuuuuuuuu /1 stays the same and /" increases. ()ooooooooooooooooooooooooo /1 increases and /" decreases. ()nnnnnnnnnnnnnnnnnnnnnnnnn /1 stays the same and /" stays the same. ()ppppppppppppppppppppppppp /1 decreases and /" stays the same. ()ddddddddddddddddddddddddd /1 decreases and /" stays the same. ()fffffffffffffffffffffffff /1 stays the same and /" stays the same.

()::::::::::::::::::::::::: /" stays the same and /( stays the same. The growth rates of monetary aggregates ()************************** follow one another e9actly..)hapter ( 6hat 3s /oney>  == )115 3f an individual moves money from a (noninstitutional) money mar+et mutual fund to a largeC denomination time deposit account. ()9999999999999999999999999 /" decreases and /( stays the same. ()ssssssssssssssssssssssssss the 1. Answer: Question Status: revious !dition )11. ()eeeeeeeeeeeeeeeeeeeeeeeeee /1 increases and /" decreases. ()bbbbbbbbbbbbbbbbbbbbbbbbbb /1 increases and /" stays the same.. ()pppppppppppppppppppppppppp the 1. Answer: Question Status: 4ew )1-? The decade during which the growth rates of monetary aggregates diverged the most is ()oooooooooooooooooooooooooo the 1. ()hhhhhhhhhhhhhhhhhhhhhhhhhh /" stays the same and /( stays the same. Answer: Question Status: revious !dition )11. ()iiiiiiiiiiiiiiiiiiiiiiiiii /" increases and /( decreases. ()++++++++++++++++++++++++++ tend to move together in the short run but not in the long run. ()aaaaaaaaaaaaaaaaaaaaaaaaaa /" increases and /( decreases. ()llllllllllllllllllllllllll are unrelated in the long run. ()yyyyyyyyyyyyyyyyyyyyyyyyy /" stays the same and /( increases.=?s. ()gggggggggggggggggggggggggg /" stays the same and /( increases. ()nnnnnnnnnnnnnnnnnnnnnnnnnn are most closely related during the 1.. ()ffffffffffffffffffffffffff /" decreases and /( stays the same. Answer: Question Status: 4ew . ()'''''''''''''''''''''''''' the 1.-?s.?s.?s. ()cccccccccccccccccccccccccc /1 stays the same and /" increases. Answer: Question Status: revious !dition )11= 3f an individual moves money from a (noninstitutional) money mar+et mutual fund to a money mar+et deposit account. 3f an individual moves money from a money mar+et deposit account to currency. ()rrrrrrrrrrrrrrrrrrrrrrrrrr the 1.?s. ()mmmmmmmmmmmmmmmmmmmmmmmmmm tend to move together in the long run but can diverge in the short run.5?s. ()dddddddddddddddddddddddddd /1 stays the same and /" stays the same.

suggests that ()yyyyyyyyyyyyyyyyyyyyyyyyyy the initial statistics are pretty good. ()+++++++++++++++++++++++++++ of only (a) and (b) of the above. Answer: Question Status: Study 8uide )1-" An e9amination of revised money supply statistics. ()wwwwwwwwwwwwwwwwwwwwwwwwww both (a) and (b) of the above. when compared to the initial statistics. sometimes by large amounts. ()vvvvvvvvvvvvvvvvvvvvvvvvvv a reliable guide to the shortCrun behavior of the money supply. /ish+in 0 Economics of Money. Answer: Question Status: revious !dition . Answer: Question Status: revious !dition )1-1 The #ed revises its estimates of the monetary aggregates. Banking. ():::::::::::::::::::::::::: the initial statistics do not provide a good guide to shortCrun movements in the money supply. ()ddddddddddddddddddddddddddd wee+ly monetary data need to be ad*usted for the %wee+end effect.=. Answer: Question Status: revious !dition )1-( The #ed revises its estimates of the monetary aggregates. because ()ccccccccccccccccccccccccccc large depository institutions need only report their deposits infre'uently.& ()eeeeeeeeeeeeeeeeeeeeeeeeeee monthly monetary data need to be ad*usted for the %payday effect. because ()ggggggggggggggggggggggggggg small depository institutions need only report their deposits infre'uently.& ()*************************** of all of the above. ()uuuuuuuuuuuuuuuuuuuuuuuuuu a reliable guide to the longCrun behavior of the money supply. ()bbbbbbbbbbbbbbbbbbbbbbbbbbb the initial statistics provide a good guide of monetary policy. sometimes by large amounts. Seventh !dition )1-1 8enerally.  #rederic S. and Financial Markets. ()aaaaaaaaaaaaaaaaaaaaaaaaaaa the initial statistics provide a poor guide of monetary policy because they are usually underestimates of the revised statistics.& ()fffffffffffffffffffffffffff of none of the above. ()99999999999999999999999999 both (b) and (c) of the above. ()hhhhhhhhhhhhhhhhhhhhhhhhhhh seasonal ad*ustments become more precise only as more data become available. ()iiiiiiiiiiiiiiiiiiiiiiiiiii monthly monetary data need to be ad*usted for the %payday effect. the data initially reported by the #ed are ()tttttttttttttttttttttttttt not a reliable guide to the shortCrun behavior of the money supply. though they are usually underestimates of the revised statistics.

and /(> ()lllllllllllllllllllllllllll The three measures do not move together. ()wwwwwwwwwwwwwwwwwwwwwwwwwww The three measures do not move together. ()vvvvvvvvvvvvvvvvvvvvvvvvvvv 3nitial estimates of the money supply are a reliable guide to what is happening to the money supply in the short run. ()ooooooooooooooooooooooooooo 7oth (a) and (c) of the above. . ()999999999999999999999999999 All of the above. Answer: Question Status: revious !dition )1-. ()rrrrrrrrrrrrrrrrrrrrrrrrrrr The three measures do not move together. and /(> ()ppppppppppppppppppppppppppp /1 is the narrowest measure. /".? )1-. so they cannot be used interchangeably by policyma+ers.)hapter ( 6hat 3s /oney>  . Answer: Question Status: revious !dition   Essay Questions !9plain the functions of money and the problems of barter that each overcomes. ()yyyyyyyyyyyyyyyyyyyyyyyyyyy @nly (a) and (b) of the above. /".6hich of the following statements accurately describes the three different measures of the money supply2/1. ()ttttttttttttttttttttttttttt @nly (a) and (b) of the above. and /(> ()uuuuuuuuuuuuuuuuuuuuuuuuuuu /" is the narrowest measure. ()nnnnnnnnnnnnnnnnnnnnnnnnnnn ShortCrun movements in the money supply are e9tremely reliable. ()sssssssssssssssssssssssssss All of the above. )1 )" Giscuss the advantages and disadvantages of monetary union in !urope. so they cannot be used interchangeably by policyma+ers. even on a monthCtoCmonth basis. so they cannot be used interchangeably by policyma+ers. /". ()mmmmmmmmmmmmmmmmmmmmmmmmmmm The three measures< movements closely parallel each other. 6hich of the following statements accurately describes the three different measures of the money supply2/1. ()''''''''''''''''''''''''''' 3nitial estimates of the money supply are not a reliable guide to what is happening to the money supply in the short run. The payments system has evolved from commodity money to fiat money to chec+s to electronic money. Giscuss one advantage and one disadvantage of each form of money. Answer: Question Status: revious !dition )1-5 6hich of the following statements accurately describes the three different measures of the money supply2/1.

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