31) When money is used to compare the relative price of a burrito and a taco, money is
being used as a
A) medium of exchange.
B) store of value.
C) measurement of inlation.
D) unit of account.
E) token of bartering.
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
32) The store of value function is deined as the
A) pricing of goods and services in one measure.
B) exchange of goods and services directly for other goods and services.
C) holding of money from one transaction to be used later in another transaction.
D) double coincidence of wants that is used in the debate over barter versus money.
E) use of money as a medium of exchange.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
33) When we keep part of our wealth in a bank checking account, we are using money as a
A) store of value.
B) medium of exchange.
C) barter token.
D) unit of account.
E) unit of currency.
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
11
34) When we keep part of our wealth in a bank checking account, we are using money as a
________ because ________.
A) store of value; we are holding the money to exchange for goods at a later time
B) medium of exchange; we are holding the money to gain interest earned
C) barter token; we are holding the money to exchange for goods at a later time
D) unit of account; we are holding the money to exchange for goods at a later time
E) unit of currency; we have agreed upon the value of the money with bank
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: New
AACSB: Relective thinking
35) Keeping $20 in currency to be able to buy gasoline, money is performing which
function?
A) medium of exchange
B) unit of account
C) store of value
D) barter mechanism
E) symbol of iat
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
36) The word “iat” is
A) used to describe today’s money because it is money set by law.
B) used to describe money from when Kings ruled by decree or iat.
C) the term used to deine the concept of barter.
D) another word to mean the “double coincidence of wants.”
E) Latin for “backed by gold.”
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
12
37) Money today
A) is the demand for loanable funds.
B) is the supply of loanable funds.
C) is only currency inside banks.
D) is iat money.
E) in the United States, is only dollar bills and coins .
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
38) The U.S. dollar is called
A) iat money because the law decrees it is money.
B) faith money.
C) commodity money, because it is convertible into gold.
D) frail money because wear and tear ruins paper bills.
E) convertible money because the government stands ready to convert it into gold or silver.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
39) Fiat money means
A) Italian currency.
B) money’s value does not change.
C) the government has decreed that something is money.
D) the money can be converted into gold.
E) only currency counts as money.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
13
40) The objects that we use as money today are
A) checks and credit cards.
B) currency and checks.
C) currency and deposits.
D) deposits and checks.
E) currency, deposits, and gold.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
41) Which statement most accurately captures the state of money today?
A) Money today includes currency, bank deposits and checks.
B) Money today includes currency and checks but not bank deposits.
C) Money today includes bank deposits and currency but not checks.
D) Money today includes bank deposits and checks but not currency.
E) Money today includes checks and credit cards.
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
42) Which of the following is an example of money?
A) currency in your wallet
B) currency inside the banks
C) checks written as payment for a good or service
D) credit card used as a payment for a good or service
E) a debit card
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
14
43) The objects we use as money today include
A) currency inside banks and bank deposits.
B) currency outside the banks and bank deposits.
C) only currency outside the banks.
D) only deposits inside the banks.
E) credit cards and debit cards.
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
44) Checkable deposits are money because
A) they are protected by the Federal Reserve.
B) they are guaranteed by banks.
C) checks bounce when there are not enough funds to cash them.
D) they can be converted into currency on demand and are used directly as a means of
payment.
E) only banks and other inancial institutions can ofer them.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
45) Which of the following is the best example of money?
A) phone card
B) checkable deposit
C) credit card
D) gold
E) share of Intel stock
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
15
46) Which of the following is money?
A) credit card
B) debit card
C) e-checks
D) checkable deposit
E) checks
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
47) Which of the following is money?
A) a credit card with no credit left
B) the check you write to pay tuition
C) a credit card that still has credit available on it
D) a checkable deposit in your bank
E) the current credit available on a credit card
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
48) Which of the following is money?
A) debit cards
B) e-checks
C) credit cards
D) checkable deposits
E) checks
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
16
49) Checks are not money because they
A) are just instruments to transfer money between banks.
B) are not guaranteed by banks.
C) can bounce when there are not enough funds to cash them.
D) are not issued by the government.
E) are not always accepted when trying to purchase goods or services.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
50) If you use a check to pay your monthly rent,
A) the check is considered money because you received something in return.
B) the check is not money because it is just an instruction to your bank to make a payment.
C) you have used money because the landlord accepted it as a means of payment.
D) the check becomes money when it arrives at the landlord’s bank.
E) the check is not money because it is not part of M1.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
51) A credit card is
A) money.
B) barter money.
C) not money.
D) iat money.
E) not money, but the card’s credit line is money.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
17
52) Credit cards are
A) a form of money used to make purchases.
B) a special ID card that is not money.
C) a special ID card that is the same as money.
D) a form of money that is not generally accepted.
E) included in the M1 measure of money.
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
53) When you use a credit card to pay your tuition,
A) you’ve used the credit card as money because it is a means of payment.
B) the credit card is not money but is an ID card for an instant loan.
C) the credit card is not money because it involves an electronic transaction.
D) the credit card is not money because it is not oicially issued by the government.
E) you’ve used the credit card as money because you received something in return.
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
54) Credit cards are
i. a generally accepted form of payment and therefore part of M1.
ii. included in M1 because you write a check to pay your monthly bill.
iii. a means of borrowing money.
A) i only
B) ii only
C) iii only
D) i and ii
E) i and iii
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
18
55) When Dale buys a new computer for $1,000 using a credit card,
A) he is taking out a loan for $1,000.
B) his bank account decreases by $1,000.
C) the credit card is acting as money.
D) the money supply decreases by $1,000.
E) the credit card is performing the function of an unit of account.
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
56) Debit cards and e-checks are not money because
A) they can be forged easily.
B) they can fail their purpose of being mediums of exchange as a result of technical
diiculties.
C) they are just instruments to transfer money between people.
D) not all banks ofer them and not all businesses accept them.
E) they are not regulated by the government.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
57) A debit card is
A) money because it is a means of payment.
B) not money but is used to transfer bank deposits which are money.
C) money because it is generally accepted as a means of payment.
D) not money because it is not oicially issued by the government.
E) part of the M2 money supply but not part of the M1 money supply.
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
19
58) Which of the following are considered money?
i. electronic checks
ii. paper checks
iii. the deposit transferred using an e-check
A) i, ii and iii
B) i and iii
C) i and ii
D) iii only
E) ii and iii
Skill: Level 2: Using deinitions
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
59) An oicial measure of money in the United States is M1, which includes the sum of
A) checkable deposits plus small time deposits.
B) currency plus checkable deposits.
C) currency plus credit card transactions.
D) currency plus traveler’s checks plus time deposits.
E) currency plus traveler’s checks plus checkable deposits plus small time deposits plus
money market funds and other deposits.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
60) M1 is composed of
A) currency held by individuals and businesses, traveler’s checks, and checkable deposits
owned by individuals and businesses.
B) checkable deposits owned by individuals and businesses, saving deposits, and
certiicates of deposit.
C) currency inside of banks, traveler’s checks, and government-issued checks.
D) traveler’s checks, credit cards, and e-cash.
E) currency held by individuals and businesses, traveler’s checks, and the credit line on
credit cards.
Skill: Level 1: Deinition
Section: Checkpoint 11.1
Status: Old
AACSB: Relective thinking
20