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Macro Practice test 4 1. Money functions as: A) a store of value. B) a unit of account. C) a medium of exchange. D) all of the above. 2. If you are estimating your total expenses for school next semester, you are using money primarily as: A) a medium of exchange. B) a store of value. C) a unit of account. D) an economic investment. 3. If you place a part of your summer earnings in a savings account, you are using money primarily as a: A) medium of exchange. B) store of value. C) unit of account. D) standard of value. 4. Stock market price quotations best exemplify money serving as a: A) store of value. B) unit of account. C) medium of exchange. D) index of satisfaction. 5. Purchasing common stock by writing a check best exemplifies money serving as a: A) store of value. B) unit of account. C) medium of exchange. D) index of satisfaction. Page 1 6. When economists say that money serves as a medium of exchange, they mean that it is: A) a way to keep wealth in a readily spendable form for future use. B) a means of payment. C) a monetary unit for measuring and comparing the relative values of goods. D) declared as legal tender by the government. 7. When economists say that money serves as a unit of account, they mean that it is: A) away to keep wealth in a readily spendable form for future use. B) a means of payment. C) a monetary unit for measuring and comparing the relative values of goods. D) declared as legal tender by the government. 8. The money supply is backed: A) by the government's ability to control the supply of money and therefore to keep its value relatively stable. B) by government bonds. C) dollar-for-dollar with gold and silver. D) dollar-for-dollar with gold bullion. 9. The value of money varies: A) inversely with the price level. B) directly with the volume of employment. C) directly with the price level. D) directly with the interest rate. 10. Nearly one-half the money in the U.S. economy is created by: A) the receipt of gold bullion through international trade and finance. B) commercial banks and thrift institutions. C) the Federal mint. D) the Federal Treasury. 11. The purchasing power of money and the price level vary: A) inversely. B) directly during recessions, but inversely during inflations. C) directly, but not proportionately. D) directly and proportionately. 12. The M 2 money supply includes: A) stock certificates. B) corporate bond certificates. C) the cash value of life insurance policies. D) individual shares in money market mutual funds. 13. A checking account entry is money because it: A) is ensured by the Federal Deposit Insurance Corporation. B) has been declared as such by the Federal government. C) performs the functions of money.... View Full Document

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