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1. Economic growth and the creation of jobs depend on the availability of money.
2. Most countries restrict the flow of money in and out of their borders.
3. Economic events in other nations seldom impact the powerful U.S. economy.
4. Barter is the trading of goods and services for other goods and services.
5. Barter involves the use of electronic payment systems, like Paypal.com, for online
transactions.
6. Money is anything people generally accept as payment for goods and services.
7. Efficient monetary systems eliminate the use of barter.
8. A barter exchange is a system where you input into a system the goods and services that
you are willing to trade, and receive trade credit.
9. Coins and bills are portable and durable.
10. The strength of the U.S. money system rests on the silver content of the coins.
11. Electronic cash is one of the newest forms of money.
12. Historically, coins and paper money complicated the exchange process.
13. The U.S. government has done its best to create dollar bills that are easily duplicated.
14. Companies are now developing ways to send money across national boundaries using e-
cash.
15. The President of the U.S. is in control of the money supply in the U.S.
16. Several European countries report a significant decrease in the level of jobs, income, and
production of goods and services. The size and strength of the U.S. economy insulates U.S.
businesses from the economic problems of other countries.
17. Real dollars are made with various lines of colors such as peach and blue. They have art
work that is off-center, and there are other identifiable watermarks for the purpose of making
replication quite easy.
18. The currencies of some countries, although durable and portable, are relatively unstable,
which makes international exchanges difficult.
19. The problem with barter exchanges is that it is too difficult to find people to exchange
your good with.
20. Trading internationally by using money appears easy and almost effortless, but the fact is
there is a very complex banking system that makes it happen.
21. According to the
Adapting to Change
box, it's hard to determine the exact value of
Bitcoin.
22. The U.S. production of the Sacagawea dollar coins provides greater durability than paper
dollar bills.
23. The people living on the island nation of Wacki-ki readily accept a certain type of seashell
as payment for the goods and services they trade. For Wackians (the name of Wacki-ki natives),
seashells serve as money.
24. When Mrs. Sweet exchanges her famous chocolate chip cookies for the lawn care
services of her neighbor, she engages in a barter transaction.
25. The money supply represents the amount of money the Federal Reserve Bank makes
available for people to buy goods and services.
26. Both the M-1 and M-2 definitions of money include coins and paper money.
27. The M-1 money supply includes money in savings accounts, mutual funds, and money
market accounts.
28. M-2 represents the most commonly used definition of the money supply.
29. The M-1 definition of the money supply includes travelers' checks.
30. The M-3 includes M-1 money, but not M-2 money.
31. A significant increase in the money supply creates inflationary pressures in the economy.
32. Inflation occurs in an economy with too little money chasing too many goods.
33. Changes in the money supply produce little or no change in inflation, employment and
economic growth.
34. When the value of the dollar falls, foreign goods become less expensive for American
consumers.
35. The strength of the U.S. dollar depends on the strength of the U.S. economy relative to the
economies of other nations.
36. The Federal Reserve establishes the tax policies of the U.S.
37. Theoretically, with the proper monetary policy, the U.S. economy can continue to grow
without causing inflation.
38. The Federal Reserve consists of seven Federal Reserve districts.
39. The President of the U.S appoints the members of the Federal Reserve's board of
governors.
40. Open-market operations is the buying and selling of government securities by the Federal
Reserve Board.
41. The reserve requirement represents the interest rate charged by the Federal Reserve for
government-guaranteed student loans.
42. The reserve requirement represents the Fed's most powerful tool for conducting monetary
policy.
43. When the Fed increases the reserve requirement, banks make fewer loans.
44. When the Federal Reserve wants to increase the money supply, they decrease the reserve
requirement.
45. When the Federal Reserve acts to reduce inflation, they decrease the reserve
requirement.
46. The Fed commonly buys or sells U.S. government securities to regulate the money supply.
47. The federal funds rate is the interest rate that banks charge each other.
48. The rate of interest charged by the Federal Reserve is called the federal funds rate.
49. The three basic tools the Fed uses to manage the money supply are reserve requirements,
open-market operations, and the discount rate.
50. The Federal Reserve assists in the processing of checks between banks.
51. The electronic transfer of money increases the Federal Reserve's check-clearing
operations.
52. The goal of Federal Reserve monetary policy is to affect the level of competition in the
U.S. banking system.
53. When the value of the euro increases compared to the U.S. dollar, the price of U.S.
exports to Europe will decrease.
54. If you are trying to sell your state-of-the-art bicycles into the Japanese market, you are
likely to sell more bicycles if the dollar has strength against the Japanese yen.
55. To decrease the money supply, the Federal Reserve sells U.S. government bonds in open-
market operations.
56. When the Fed increases the reserve requirement it forces banks to increase the number
of loans they make.
