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CHAPTER 29 - Chapter29 TheMonetary System 1 Barter exchange...

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Chapter 29/The Monetary System 171 Chapter 29 The Monetary System 1. Barter exchange tends to be inefficient because a. gold is difficult to transport. b. it limits the time and effort required for trade. c. it can be a very time-consuming process to find a double coincidence of wants. d. a standardized unit of value can be difficult to find in a primitive economy. ANSWER: c it can be a very time-consuming process to find a double coincidence of wants. SECTION: 1 OBJECTIVE: 1 2. In order for something to function well as a medium of exchange, it must be 3. If a society chooses fiat money as its money form, it 4. Which of the following is the most liquid category of assets? 5. Fred Jones won a lottery prize of $1 million. He put the money in the bank to save it for his  daughter’s college education. For him, money was functioning primarily as a a. unit of account. b. store of value. c. means of payment. d. type of short-term loan. ANSWER: b store of value. SECTION: 1 OBJECTIVE: 1
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172 Chapter 29/The Monetary System 6. Which of the following is not included in the M1 money stock?
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