macro hw 5 - hw5 Multiple Choice Identify the choice that...

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hw5 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Money a. is more efficient than barter. b. makes trades easier. c. allows greater specialization. d. All of the above are correct. 2. Paper money a. has a high intrinsic value. b. is the primary medium of exchange in a barter economy. c. is valuable because it is generally accepted in trade. d. is valuable only because of the legal tender requirement. 3. The existence of money leads to a. greater specialization in production, but not a higher standard of living. b. a higher standard of living, but not greater specialization. c. greater specialization and a higher standard of living. d. neither greater specialization or a higher standard of living. 4. Changes in the quantity of money affect a. interest rates b. prices c. production d. All of the above are correct 5. Which of the following is a store of value? a. currency b. U.S. government bonds c. fine art d. All of the above are correct. 6. Which of the following best illustrates the unit of account function of money? a. You list prices for candy sold on your Web site, www.sweettooth.com, in dollars. b. You pay for your WNBA tickets with dollars. c. You keep $10 in your backpack for emergencies. d. None of the above is correct. 7. The “yardstick” people use to post prices and record debts is called a. a medium of exchange. b. a unit of account. c. a store of value. d. liquidity. 8. Economists use the word "money" to refer to a. income generated by the production of goods and services. b. those assets regularly used to buy goods and services. c. the value of a person's assets. d. the value of stocks and bonds. 9. Liquidity refers to a. the ease with which an asset is converted to the medium of exchange. b. a measurement of the intrinsic value of commodity money.
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c. the suitability of an asset to serve as a store of value. d. how many time a dollar circulates in a given year. 10. Which list ranks assets from most to least liquid? a. currency, fine art, stocks b. currency, stocks, fine art c. fine art, currency, stocks d. fine art, stocks, currency 11. Current U.S. currency is a. fiat money with intrinsic value. b. fiat money with no intrinsic value. c. commodity money with intrinsic value. d. commodity money with no intrinsic value. 12. The legal tender requirement means that a. people are more likely to accept the dollar as a medium of exchange. b. the government must hold enough gold to redeem all currency. c. people may not make trades with anything else. d. All of the above are correct. 13. M1 includes a. currency. b. demand deposits. c. travelers' checks. d. All of the above are correct. 14. Which of the following is included in M2 but not in M1? a. currency
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macro hw 5 - hw5 Multiple Choice Identify the choice that...

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