Exam 2: Money and the Payments System

A) $880 billion.
B) $1700 billion.
C) $10.2 trillion.
D) $14 trillion.

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A) credit cards.
B) debit cards.
C) stored value cards.
D) e-cash.

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A) how quickly prices are increasing.
B) how quickly output is increasing.
C) the number of times each dollar in the money supply is used to buy goods and services included in GDP.
D) the growth rate of the money supply.

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A) the same thing as a liability.
B) a thing of value that can be owned.
C) money, as opposed to stock or bonds.
D) anything that never declines in value.

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In terms of the issues discussed in this...

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A) any government role in the economy.
B) specialization.
C) people to have a double coincidence of wants.
D) the market system.

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Income is equal to a person's earnings o...

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A) inflation.
B) interest rates.
C) economic growth.
D) unemployment.

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A) most accounting systems reflect that goods are purchased with currency.
B) most accounting systems reflect that goods are purchased with checks.
C) money gives traders a way of measuring value in the economy.
D) money makes it possible for specialization to take place.

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A) those who already have fixed-rate loans
B) those considering taking out a loan
C) lenders that already made loans
D) lenders considering whether to make new loans

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A) currency.
B) gold coins.
C) anything that is generally accepted as payment for goods and services.
D) checks at commercial banks.

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Research indicates that the more indepen...

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A) gold coins
B) dollar bills
C) British pound notes
D) Japanese yen notes

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A) payments by checks are usually deferred until the checks clear the bank.
B) money earns interest while loan payments are deferred.
C) money provides a standard for payments that will occur in the future.
D) money today is worth less than money tomorrow.

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A) individuals produce the goods or services for which they have relatively the best ability.
B) goods are traded directly for goods and money is not used.
C) individuals who produce goods do not also produce services and individuals who produce services do not also produce goods.
D) individuals are assigned to occupations on the basis of tests that gauge their relative abilities.

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A) the sum of the value of assets.
B) equal to income.
C) a flow variable.
D) the sum of the value of assets minus value of liabilities.

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A) it is convinced that M1 is the best measure of the money supply.
B) it is convinced that M2 is the best measure of the money supply.
C) it is an issue of ongoing research.
D) it is reverting to considering currency alone as the best measure of the money supply.

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A) They reduce the likelihood of missed payments.
B) They reduce transactions costs associated with check processing.
C) They reduce the costs that lenders incur in notifying customers of missed payments.
D) They typically involve digital cash.

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