ECON 1101 Final Exam Questions with Verified Solutions Graded A+
B. a double coincidence of wants - Answers In macroeconomics, ___________________________
describes a situation in which two people each want to exchange some good or service that the
other can provide.
A. a medium of exchange
B. a double coincidence of wants
C. interrelated banking
D. the usefulness of money
C. Barter; for trying to coordinate trades - Answers ____________ is a completely inadequate
mechanism ____________________ in a modern advanced economy.
A. Currency; for providing a medium of exchange
B. Money; for providing a store of value
C. Barter; for trying to coordinate trades
D. Money; to use as a unit of account
D. medium of exchange - Answers In modern economies, credit cards are a _________________
because of their wide acceptance as a method of payment for both goods and services.
A. unit of exchange
B. store of value
C. unit of account
D. medium of exchange
A. M2 - Answers Which category of the money supply would you be contributing to if you invest
in money market funds?
A. M2
B. M1
C. time deposits
D. savings deposits
D. M1 - Answers Which of the following terms is considered to be a narrow definition of the
money supply that includes, among other things, currency?
, A. savings
B. money
C. M2
D. M1
C. the credit card company's M1 funds. - Answers If Brent uses his credit card to purchase a
new television, then the money to pay the retailer is taken from:
A. his M1 funds.
B. his M2 funds.
C. the credit card company's M1 funds.
D. the credit card company's M2 funds.
D. $510 million, $600 - Answers Stealth bank has deposits of $600 million. It holds reserves of
$30 million and government bonds worth $80 million. If the bank sells its loans at market value
of $400 million, what will its total assets equal? What is total liabilities?
A. $110 million, $480
B. $710 million, $680
C. $480 million, $630
D. $510 million, $600
B. $270 million - Answers Stealth bank has deposits of $700 million. It holds reserves of $20
million and has purchased government bonds worth $350 million. The bank's loans, if sold at
current market value, would be worth $600 million. What does Stealth bank's net worth equal?
A. $120 million
B. $270 million
C. $1.02 billion
D. $970 million
B. Reserves - Answers ___________are funds that the bank keeps on hand that are not loaned out
or invested in bonds.
A. Certificates of deposit
B. Reserves
B. a double coincidence of wants - Answers In macroeconomics, ___________________________
describes a situation in which two people each want to exchange some good or service that the
other can provide.
A. a medium of exchange
B. a double coincidence of wants
C. interrelated banking
D. the usefulness of money
C. Barter; for trying to coordinate trades - Answers ____________ is a completely inadequate
mechanism ____________________ in a modern advanced economy.
A. Currency; for providing a medium of exchange
B. Money; for providing a store of value
C. Barter; for trying to coordinate trades
D. Money; to use as a unit of account
D. medium of exchange - Answers In modern economies, credit cards are a _________________
because of their wide acceptance as a method of payment for both goods and services.
A. unit of exchange
B. store of value
C. unit of account
D. medium of exchange
A. M2 - Answers Which category of the money supply would you be contributing to if you invest
in money market funds?
A. M2
B. M1
C. time deposits
D. savings deposits
D. M1 - Answers Which of the following terms is considered to be a narrow definition of the
money supply that includes, among other things, currency?
, A. savings
B. money
C. M2
D. M1
C. the credit card company's M1 funds. - Answers If Brent uses his credit card to purchase a
new television, then the money to pay the retailer is taken from:
A. his M1 funds.
B. his M2 funds.
C. the credit card company's M1 funds.
D. the credit card company's M2 funds.
D. $510 million, $600 - Answers Stealth bank has deposits of $600 million. It holds reserves of
$30 million and government bonds worth $80 million. If the bank sells its loans at market value
of $400 million, what will its total assets equal? What is total liabilities?
A. $110 million, $480
B. $710 million, $680
C. $480 million, $630
D. $510 million, $600
B. $270 million - Answers Stealth bank has deposits of $700 million. It holds reserves of $20
million and has purchased government bonds worth $350 million. The bank's loans, if sold at
current market value, would be worth $600 million. What does Stealth bank's net worth equal?
A. $120 million
B. $270 million
C. $1.02 billion
D. $970 million
B. Reserves - Answers ___________are funds that the bank keeps on hand that are not loaned out
or invested in bonds.
A. Certificates of deposit
B. Reserves
