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13 - Barter consists of)A the direct exchange of one good...

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Barter consists of: ( ) A) the direct exchange of one good for another without the use of money. ( ) B) the ability to conduct a clever negotiation. (X) C) the purchase of a good for money at a flea market. ( ) D) None of the above are true. Feedback: Barter is the direct exchange of one good for another, without the use of money. It is certainly the case that: (X) A) money is anything that is commonly accepted in trade. ( ) B) if you can't feel it or touch it, it isn't money. ( ) C) Neither (a) nor (b) are true. ( ) D) Both (a) and (b) are true. Feedback: Money is anything generally accepted as a medium of exchange. Examples of things that have been or are currently used as money include: ( ) A) U.S. dollars. ( ) B) tobacco. ( ) C) furs. (X) D) All of the above are relevant examples. Feedback: All of these have been or are currently used as money. Which of the following represents the largest single element of the M1 money supply? (X) A) Cash and coins. ( ) B) U.S. savings bonds. ( ) C) Transactions accounts such as checking accounts. ( ) D) Paper money that is backed by
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gold or silver to give it value. Feedback: At $760 billion, cash and coins (currency in circulation) represent the largest part of M1 which totals $1,367 billion. When a bank makes a loan: ( ) A) it causes a reduction in the money supply. ( ) B) it causes an increase in the money supply. (X) C) it can cause either an increase or a decrease in the money supply depending on the elasticity of supply. ( ) D) it can stimulate business activity but there is no effect on the money supply. Feedback: When a bank lends money the money supply increases. The term "reserve ratio":
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13 - Barter consists of)A the direct exchange of one good...

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