ECON 2100 Chapter 13
Quiz with complete
verified solutions
Coins were minted with serrated edges - answer to prevent the coins from
being clipped
Whatever serves as a medium of exchange is - answer money
Who is famous for his observation that bad money drives out good money? -
answer Thomas Gresham
Barter is the exchange of goods and services without the use of money. -
answer True
In a barter system, - answer it is difficult to keep track of the relative values
of goods and services
Which of the following best illustrates the double coincidence of wants? -
answer Tom has something he's willing to trade to Jerry, who wants it; Jerry
has something he's willing to trade to Tom, who wants it.
Flat money - answer has value because people accept it
If the cost of producing coins is lower than the face value of the coins, then
the government receives revenue called - answer seigniorage, and produces
token coins
, Goldsmiths are considered to be the forerunners of modern banks because
they - answer created money by lending out gold reserves
Open-market operations involve - answer the Fed's purchase and sale of
government securities
The Banking Act of 1933 - answer forbade banks from buying corporate
stocks and bonds, in order to minimize bank risk
The primary purpose of the Federal Open Market Committee (FOMC) is to -
answer buy and sell government securities
The discount rate is the interest rate that - answer the Fed charges on loans
to depository institutions
The reserve requirement is - answer the percentage of deposits that banks
are required to hold as reserves
In the United States, only Federal Reserve Banks can issue paper currency
but their power to do so is virtually unlimited. - answer True
The Dodd-Frank Wall Street Reform and Consumer Protection Act included all
of the following provisions except one. Which is the exception? - answer the
law gives the Federal Reserve the authority to establish a reserve
requirement for all financial institutions
The banking crisis of the 1980s was due, in part, to all of the following except
one. Which is the exception? - answer the highly concentrated U.S. banking
industry, where big banks had branches in nearly every state
When prices rise, - answer the purchasing power of money decreases
Quiz with complete
verified solutions
Coins were minted with serrated edges - answer to prevent the coins from
being clipped
Whatever serves as a medium of exchange is - answer money
Who is famous for his observation that bad money drives out good money? -
answer Thomas Gresham
Barter is the exchange of goods and services without the use of money. -
answer True
In a barter system, - answer it is difficult to keep track of the relative values
of goods and services
Which of the following best illustrates the double coincidence of wants? -
answer Tom has something he's willing to trade to Jerry, who wants it; Jerry
has something he's willing to trade to Tom, who wants it.
Flat money - answer has value because people accept it
If the cost of producing coins is lower than the face value of the coins, then
the government receives revenue called - answer seigniorage, and produces
token coins
, Goldsmiths are considered to be the forerunners of modern banks because
they - answer created money by lending out gold reserves
Open-market operations involve - answer the Fed's purchase and sale of
government securities
The Banking Act of 1933 - answer forbade banks from buying corporate
stocks and bonds, in order to minimize bank risk
The primary purpose of the Federal Open Market Committee (FOMC) is to -
answer buy and sell government securities
The discount rate is the interest rate that - answer the Fed charges on loans
to depository institutions
The reserve requirement is - answer the percentage of deposits that banks
are required to hold as reserves
In the United States, only Federal Reserve Banks can issue paper currency
but their power to do so is virtually unlimited. - answer True
The Dodd-Frank Wall Street Reform and Consumer Protection Act included all
of the following provisions except one. Which is the exception? - answer the
law gives the Federal Reserve the authority to establish a reserve
requirement for all financial institutions
The banking crisis of the 1980s was due, in part, to all of the following except
one. Which is the exception? - answer the highly concentrated U.S. banking
industry, where big banks had branches in nearly every state
When prices rise, - answer the purchasing power of money decreases
