This quiz works best with JavaScript enabled. Home > Economics > Finance > General > Money – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the Federal Reserve sells bonds on the open market, what effect does this action have on the nation's money supply? A) Stays the same. B) It's uncertain. C) Increases. D) Decreases. Show Answer Correct Answer: D) Decreases. 2. ..... is money in the form of gold or silver coins. A) Commodity money. B) Fiat money. C) Representative money. D) The gold and silver standard. Show Answer Correct Answer: A) Commodity money. 3. Money must be easily divided into smaller denominations (ex. making change). A) Divisibility. B) Acceptability. C) Durability. D) Uniformity. Show Answer Correct Answer: A) Divisibility. 4. Raw materials (i.e. cotton, oil ..... etc.) A) Land. B) Labor. C) Capital. D) Entrepreneurship. Show Answer Correct Answer: A) Land. 5. Barter is the ..... form of trade. A) Simplest. B) Best. C) Most modern. D) Most complex. Show Answer Correct Answer: A) Simplest. 6. In modern times ..... A) Money is no longer needed. B) Banks can issue their own legal tender. C) Some cultures still measure their wealth in animals. D) Paper money is backed by gold. Show Answer Correct Answer: C) Some cultures still measure their wealth in animals. 7. A banking system that keeps only a small portion of deposits on hand and lends out the rest. A) Credit Union. B) Federal Reserve System. C) Federal Deposit Insurance Corporation. D) Fractional Reserve Banking. Show Answer Correct Answer: D) Fractional Reserve Banking. 8. What does the Federal Reserve do? A) Sets tax rates in the United States. B) Funds large-scale military operations. C) Regulates the stock market. D) Oversees banks and the money supply. Show Answer Correct Answer: D) Oversees banks and the money supply. 9. Who regulates money supply in India? A) Reserve Bank of India. B) Government of India. C) Commercial Banks. D) Planning Commission. Show Answer Correct Answer: A) Reserve Bank of India. 10. When the Federal Reserve wants to encourage the economy to grow, what does it do with the money supply? A) Increase the money supply. B) Decrease the money supply. C) Sell all of its assets. D) Issue more government securities. Show Answer Correct Answer: A) Increase the money supply. 11. What is true about a debit card? A) It's like a check but comes out of your account automatically. B) It's more convenient than writing a check. C) You use a PIN number to authorize purchases. D) All of the above. Show Answer Correct Answer: D) All of the above. 12. Governments have declared their currency to be ..... A) Worthless. B) Legal tender. C) Counterfeit. D) Electrum. Show Answer Correct Answer: B) Legal tender. 13. Today most of our money is issued by A) The Federal Reserve. B) Congress. C) The president. D) The states. Show Answer Correct Answer: A) The Federal Reserve. 14. ..... is money by government decree, has no alternative value A) Gold standard. B) Specie. C) Barter. D) Fiat money. Show Answer Correct Answer: D) Fiat money. 15. Each of the following FED actions will contract the money supply except A) Raise the discount rate. B) Raise the reserve ratio. C) Raise the Federal Funds rate. D) Buy bonds. Show Answer Correct Answer: D) Buy bonds. 16. This is money by decree; it works because the government says it is legal tender and you believe it has purchasing power. A) Fiat. B) Mortgage. C) Commodity. D) Securities. Show Answer Correct Answer: A) Fiat. 17. The one rupee note and coins are issued by: A) RBI (Central Bank). B) Commercial Bank. C) Central government. D) Ministry of Finance. Show Answer Correct Answer: D) Ministry of Finance. 18. Trading for things with other goods is called A) Money. B) Stealing. C) Negotiating. D) Bartering. Show Answer Correct Answer: D) Bartering. 19. When the Federal Reserve acts to increase the money supply and speed up the economy in order to achieve the goal of lowering unemployment. A) Expansionary Monetary Policy. B) Tight Money Policies. C) Contractionary Monetary Policy. D) Monetary Policy. Show Answer Correct Answer: A) Expansionary Monetary Policy. 20. In which market can you buy and sell debt securities (like a loan) that will be paid back by a certain date with interest? A) Commodity Market. B) Bond Market. C) Stock Market. D) Currency Market. Show Answer Correct Answer: B) Bond Market. 21. What is the ratio of deposits which commercial banks are required to keep with themselves called? A) CRR. B) SLR. C) Both. D) None of above. Show Answer Correct Answer: B) SLR. 22. The central banking system of the United States. A) Fractional Reserve Banking. B) Federal Deposit Insurance Corporation. C) Federal Reserve System. D) Representative Money. Show Answer Correct Answer: C) Federal Reserve System. 23. Money can be used to settle accounts in the future and this function is referred to as ..... A) Measure of value. B) Store of value. C) Standard of deferred payment. D) Unit of value. Show Answer Correct Answer: C) Standard of deferred payment. 24. A ..... is at a bank A) Sock drawer. B) Box. C) Mattress. D) Savings account. Show Answer Correct Answer: D) Savings account. 25. The key word "compare" describes which role of money? A) Unit of account/standard of value. B) Medium of exchange. C) Store of value. D) None of above. Show Answer Correct Answer: A) Unit of account/standard of value. 26. The ability to be used as, or easily converted into, cash is called A) Demand deposit. B) Money market. C) Amortization. D) Liquidity. Show Answer Correct Answer: D) Liquidity. 27. Anything used as a medium of exchange A) Money. B) Taxes. C) Interest. D) Inflation. Show Answer Correct Answer: A) Money. 28. Which part of the Fed decides when to raise or lower interest rates? A) Federal Open Market Committee. B) Board of Governors. C) Chairman. D) Advisory Committee. Show Answer Correct Answer: A) Federal Open Market Committee. 29. Which of the following is not a Quantitative Method of credit control? A) Variable Reserve Ratio (VRR). B) Bank rate policy. C) Open Market Operation (OMO). D) Margin Requirements. Show Answer Correct Answer: D) Margin Requirements. 30. Money that has value simply because the government says it does is called ..... A) Representative money. B) Currency. C) Credit. D) Fiat money. Show Answer Correct Answer: D) Fiat money. ← PreviousNext →Related QuizzesFinance QuizzesEconomics QuizzesMoney Quiz 1Money Quiz 3Money Quiz 4Money Quiz 5Money Quiz 6Money Quiz 7Money Quiz 8Money Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books