This quiz works best with JavaScript enabled. Home > Economics > Finance > General > Money – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which type of money has value because the government declares it (e.g., U.S. dollar)? A) Fiat money. B) Fixed money. C) Established money. D) Commodity money. Show Answer Correct Answer: A) Fiat money. 2. What is the interest rate called when the Fed loans money to a member bank A) Federal funds rate. B) Prime Rate. C) Interest rate. D) Discount rate. Show Answer Correct Answer: D) Discount rate. 3. Each Federal Reserve District chairman reports to the ..... A) Board of Governors. B) Governor. C) Finance Committee. D) Senate. Show Answer Correct Answer: A) Board of Governors. 4. Which part of the Fed requires members to be appointed by the President and confirmed by the Senate? A) Board of Governors. B) Federal Open Market Committee. C) Reserve Banks. D) None of above. Show Answer Correct Answer: A) Board of Governors. 5. Where labor & other factors of production are sold in the circular flow model A) Households. B) Product Market. C) Factor Market. D) Resource Market. Show Answer Correct Answer: D) Resource Market. 6. Anything that is used as a medium of exchange could be considered money. A) No way. B) Yes this is true. C) Money is only coins and currency like a $ 20 bill. D) None of above. Show Answer Correct Answer: B) Yes this is true. 7. What do businesses provide for consumers according to the circular flow model? A) Goods and services. B) Only goods. C) Only services. D) Taxes. Show Answer Correct Answer: A) Goods and services. 8. Progressive taxes A) Are higher the more you make. B) Are lower the more you make. C) Are the same for everyone. D) None of above. Show Answer Correct Answer: A) Are higher the more you make. 9. The common name for U.S. currency is: A) Orange backs. B) Yellow backs. C) Blue backs. D) Green backs. Show Answer Correct Answer: D) Green backs. 10. The Federal Reserve maintains the ..... of our currency. A) Design. B) Color. C) Value. D) Trading. Show Answer Correct Answer: C) Value. 11. The Federal Reserve System is often called A) The System. B) Supreme Fed System. C) The FED. D) All of the above. Show Answer Correct Answer: C) The FED. 12. What is the stock market? A) A type of farmers market where people buy and sell food. B) A place where parts of businesses are bought and sold. C) A special type of grocery store that sells stocks. D) A type of bank that gives out loans to new businesses. Show Answer Correct Answer: B) A place where parts of businesses are bought and sold. 13. Young Metro begins trusting banks and he deposits $ 10, 000 in his. The reserve requirement is 20%. How much can his bank now lend out? A) $ 0. B) $ 2, 000. C) $ 10, 000. D) $ 8, 000. Show Answer Correct Answer: D) $ 8, 000. 14. What happens if the Federal Reserve decreases the required reserve ratio? A) Banks can loan out more money. B) Banks cannot loan out as much money. C) Banks cannot loan out any money. D) None of above. Show Answer Correct Answer: A) Banks can loan out more money. 15. Something that keeps its value when its stored rather than used A) Unit of Account. B) Medium of Exchange. C) Portability. D) Store of Value. Show Answer Correct Answer: D) Store of Value. 16. The double goals of the Federal Reserve System that it must maintain a balance between and regulate and manage the trade-offs between full employment and price stability. A) Dual mandate. B) Dual Bipass. C) Monetary Policy. D) Fiscal Policy. Show Answer Correct Answer: A) Dual mandate. 17. The spreading of risk among many types of investments: A) Asset spread. B) Valuation. C) Diversification. D) Balancing. Show Answer Correct Answer: C) Diversification. 18. Anything that is used to determine value during the exchange of goods and services. A) Store of Value. B) Medium of Exchange. C) Barter System. D) Unit of Account. Show Answer Correct Answer: B) Medium of Exchange. 19. Anything that is legally accepted payment for goods and services. A) Markets. B) Money. C) Dividends. D) Economy. Show Answer Correct Answer: B) Money. 20. The key word "transaction" describes with which role of money? A) Unit of account. B) Medium of exchange. C) Store of value. D) None of above. Show Answer Correct Answer: B) Medium of exchange. 21. Selling ..... in a company is a way of selling slices of ownership of said company. A) Savings. B) Stock. C) Partnership. D) Profits. Show Answer Correct Answer: B) Stock. 22. The primary responsibilities of the Federal Reserve are ..... A) Making monetary decisions that regulates the economy. B) Promoting economic growth. C) Determines the supply of money. D) All of the above. Show Answer Correct Answer: D) All of the above. 23. The central bank of the United States. A) Monetary policy. B) The Federal Reserve System. C) Discount rate. D) Advisory councils. Show Answer Correct Answer: B) The Federal Reserve System. 24. ..... a system in which currency could be exchanged for a certain amount of gold. A) Legal tender. B) Gold Standard. C) FDIC. D) Specie. Show Answer Correct Answer: B) Gold Standard. 25. Printed on a Federal Reserve note is this statement: "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE. " This reflects money's function as A) All of these. B) Store of value. C) Medium of exchange. D) Portability. Show Answer Correct Answer: C) Medium of exchange. 26. What was created by President Abraham Lincoln to combat counterfeiting? A) Secret Service. B) Federal Reserve System. C) Bureau of Engraving and Printing. D) Mutilated Currency Division. Show Answer Correct Answer: A) Secret Service. 27. What is inflation? A) Rise in all prices. B) Rise in most prices. C) Rise in some prices. D) Rise in general prices. Show Answer Correct Answer: D) Rise in general prices. 28. A person who looks at current trends in the market to make decisions illustrates what style of investing? A) Socially responsible investing. B) Fundamental analysis. C) Technical analysis. D) Zero-sum investing. Show Answer Correct Answer: C) Technical analysis. 29. Two units of the same money must be the same in terms of what they will buy, that is, they must be A) Divisible. B) Uniform. C) Acceptable. D) Portable. Show Answer Correct Answer: B) Uniform. 30. Where buyers and sellers learn information from one another and voluntarily exchange goods, services, & money A) Market. B) Partnership. C) Specialization. D) Command Economy. Show Answer Correct Answer: A) Market. 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