Question

Which of the following is NOT a function of money? A. A store of value B. A measure of inflation C. A medium of exchange D. A unit of account

Which function of money is best served by bitcoin? A. A store of value B. A unit of account C. A medium of exchange  

The ease at which an asset can be converted into a medium of exchange is known as A. Wealth B. Profitability C. Inflation D. Liquidity

Economists have documented Pacific island economies in which large rocks and boulders were used as money. While this may work for a group of people who only transact with others on the island, the rocks would not be a useful form of money in the world economy because: A. Large rocks are not easily standardized B. Large rocks are not easily divisible C. Large rocks are not easy to carry D. All of the above are true

In the mid 1800's, grain sellers in Chicago would deliver their grain to warehouses and receive a paper receipt that represented their claim on the grain in storage. These receipts became so widely used that grain traders began to use them as money, and they would use the warehouse receipts to settle debts and as collateral to secure short-term loans. Despite their widespread use as a form of currency, the warehouse receipts were not fiat money because: A. Grain is a commodity, so the receipts were commodity money and not fiat money B. The receipts were not legal tender formally recognized by a government

The money in your personal checking account is counted as: A. M2 money only B. Neither M1 nor M2 money C. M1 money only D. M1 and M2 money

When our children were young, we saved their personal funds like cash birthday gifts in savings accounts at our local bank. These funds were counted as: A. Neither M1 nor M2 money B. Both M1 and M2 money C. M1 money but not M2 money D. M2 money but not M1 money

Which of the following is NOT included as M1 money? A. Currency B. Travelers checks C. Demand deposits D. All of the above are included as M1 money

Which group in the federal goverment is responsible for counting M1 and M2 money amounts? A. US Mint B. Internal Revenue Service C. Department of the Treasury D. Federal Reserve

Which problem associated with barter transactions is reduced when people conduct these transactions with money? A. Transaction costs B. Inflation C. Local sales taxes D. Deflation

Answer 1

Which of the following is NOT a function of money? B. A measure of inflation

Reason: This is not a function of money

Which function of money is best served by bitcoin? C. A medium of exchange

Reason: Bitcoin serves the function of medium of exchange for some goods and services

The ease at which an asset can be converted into a medium of exchange is known as D. Liquidity

Reason: It is the ability to convert assets into medium of exchange

Economists have documented Pacific island economies in which large rocks and boulders were used as money. While this may work for a group of people who only transact with others on the island, the rocks would not be a useful form of money in the world economy because: D. All of the above are true

Reason: All the given options are true

In the mid 1800's, grain sellers in Chicago would deliver their grain to warehouses and receive a paper receipt that represented their claim on the grain in storage. These receipts became so widely used that grain traders began to use them as money, and they would use the warehouse receipts to settle debts and as collateral to secure short-term loans. Despite their widespread use as a form of currency, the warehouse receipts were not fiat money because: A. Grain is a commodity, so the receipts were commodity money and not fiat money

Reason: Since grains have an intrinsic value of money, they are commodity money and not fiat money

The money in your personal checking account is counted as: D. M1 and M2 money

Reason: It is included in both M1 and M2

When our children were young, we saved their personal funds like cash birthday gifts in savings accounts at our local bank. These funds were counted as: B. Both M1 and M2 money

Reason: It is included in both M1 and M2

Which of the following is NOT included as M1 money? B. Travelers checks

Reason: . All of the above are included as M1 money

Which group in the federal government is responsible for counting M1 and M2 money amounts? D. Federal Reserve

Which problem associated with barter transactions is reduced when people conduct these transactions with money? A. Transaction costs

Reason: Barter system involves high transaction costs