ECON 312 - EXAM 1 QUESTIONS WITH
100% CORRECT ANSWERS
The two components of the Money Market - VERIFIED ANSWER-1: supply of money
2: demand for money
what is the main function of money? - VERIFIED ANSWER-it is a means of payment
money - VERIFIED ANSWER-any asset that is widely used by the non-bank public as a medium of
exchange.
asset - VERIFIED ANSWER-anything that makes you richer/wealthier
widely - VERIFIED ANSWER-used across the economy/generally accepted
non-bank public - VERIFIED ANSWER-private-sector, excludes the government
*we don't count what banks & govs have as money
medium of exchange - VERIFIED ANSWER-means of payments; must serve as the thing you need to
exchange
income (flow) - VERIFIED ANSWER-what you earn after a period of time
money (money stock) is measured how? - VERIFIED ANSWER-measured at a period of time.
is money a symbol or form of wealth? - VERIFIED ANSWER-money is a form of wealth.
, equation for money - VERIFIED ANSWER-money = cash + checking accts
money = currency + checking accts
currency is made up of what? - VERIFIED ANSWER-coins & notes
who makes coins? - VERIFIED ANSWER-treasury department
who makes notes? - VERIFIED ANSWER-The Fed
velocity of money - VERIFIED ANSWER-how quickly money moves across the economy
what is the most dominant currency in the world? - VERIFIED ANSWER-U.S. currency
Monetary Control Act of 1980 - VERIFIED ANSWER-laid down official measures of money in U.S.
passed in 1979
M1 (narrow measure) - VERIFIED ANSWER-M1 = currency + all checkable accts
M1 = Kb + DD
components of checkable accts - VERIFIED ANSWER-1: non-interest bearing
2: interest bearing
non-interest bearing - VERIFIED ANSWER-known as regular accts.
used to be prohibited
interest bearing - VERIFIED ANSWER-vast majority 90%
limitations on check & services charges
1971 - all banks allowed to pay interest
100% CORRECT ANSWERS
The two components of the Money Market - VERIFIED ANSWER-1: supply of money
2: demand for money
what is the main function of money? - VERIFIED ANSWER-it is a means of payment
money - VERIFIED ANSWER-any asset that is widely used by the non-bank public as a medium of
exchange.
asset - VERIFIED ANSWER-anything that makes you richer/wealthier
widely - VERIFIED ANSWER-used across the economy/generally accepted
non-bank public - VERIFIED ANSWER-private-sector, excludes the government
*we don't count what banks & govs have as money
medium of exchange - VERIFIED ANSWER-means of payments; must serve as the thing you need to
exchange
income (flow) - VERIFIED ANSWER-what you earn after a period of time
money (money stock) is measured how? - VERIFIED ANSWER-measured at a period of time.
is money a symbol or form of wealth? - VERIFIED ANSWER-money is a form of wealth.
, equation for money - VERIFIED ANSWER-money = cash + checking accts
money = currency + checking accts
currency is made up of what? - VERIFIED ANSWER-coins & notes
who makes coins? - VERIFIED ANSWER-treasury department
who makes notes? - VERIFIED ANSWER-The Fed
velocity of money - VERIFIED ANSWER-how quickly money moves across the economy
what is the most dominant currency in the world? - VERIFIED ANSWER-U.S. currency
Monetary Control Act of 1980 - VERIFIED ANSWER-laid down official measures of money in U.S.
passed in 1979
M1 (narrow measure) - VERIFIED ANSWER-M1 = currency + all checkable accts
M1 = Kb + DD
components of checkable accts - VERIFIED ANSWER-1: non-interest bearing
2: interest bearing
non-interest bearing - VERIFIED ANSWER-known as regular accts.
used to be prohibited
interest bearing - VERIFIED ANSWER-vast majority 90%
limitations on check & services charges
1971 - all banks allowed to pay interest
