Chapter 16 Money and the Banking System 16.1 What Is Money? 1) The supply of money in the U.S. economy is determined primarily by A) decisions made by the Federal Reserve and the U.S. Treasury.B) the actions of the Federal Reserve and the banking system.C) consumers and the banking system.D) the demand for money in the economy.Answer: BDiff: 1Topic: Money and the Banking SystemSkill: Fact 2) In the ________ increases in the supply of money will ________. 3) Money is A) anything that is regularly used and generally accepted in economic transactions or exchanges. B) necessary to conduct economic transactions. C) facilitates specialization in production. D) anything the government declares to have value. Answer: A Diff: 1 Topic: What is Money? Skill: Definition 4) Which of the following can be used as money? 76
5) When money is accepted as payment for a good or service, it is being used as a 6) Money solves the dilemma of a double coincidence of wants by serving as a A) medium of exchange.B) store of value.C) symbol of value.D) unit of account.Answer: ADiff: 1Topic: Three Properties of MoneySkill: ConceptualAACSB: Reflective Thinking 7) When money is used to express the value of goods and services, it is functioning as a 8) If the prices of goods and services were expressed in terms of carved wooden beads, then the carved wooden beads would be serving as a 77
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