Macro+practice+test+4

Macro+Practice+Test+4
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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
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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.
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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. D)
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