Practice Quiz Chap 11 - POP QUIZ WORKSHEET 4: CHAPTER 11...

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POP QUIZ WORKSHEET 4: CHAPTER 11 NAME: __________________________________ 1. Which of the following statements about money is false? a. Credit cards are not money. b. Money is anything that serves the functions of money. c. The narrowest definition of money is L, which stands for liquidity. d. When a bank incurs liabilities it creates money. 2. Which of the following statements concerning money is true? a. Money must have an inherent value to function as a medium of exchange. b. The unit-of-account function of money requires that prices never change. c. As long as money is serving as a medium of exchange, it automatically also serves as a store of wealth. d. The largest component of money is currency in circulation. 3. Which of the following is true of banks? a. Banks hold reserves either as cash or as deposits at the Fed. b. Banks operate in a regulatory-free environment. c. The existence of deposit insurance makes runs on banks likely. d. Spread is calculated by adding the interest rate a bank receives on funds loaned out and the bank’s cost of funds.
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This note was uploaded on 04/18/2011 for the course ECON 131 taught by Professor Tba during the Spring '08 term at University of Hawaii, Manoa.

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Practice Quiz Chap 11 - POP QUIZ WORKSHEET 4: CHAPTER 11...

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