This quiz works best with JavaScript enabled. Home > Economics > Finance > General > Money – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Discretionary spending by the government is A) A system to establish a balanced budget. B) A free choice for spending. C) Always in the form of a sales tax. D) Set by the Constitution. Show Answer Correct Answer: B) A free choice for spending. 2. Which of the following is not counted as part of M1? A) Federal Reserve notes or " paper money". B) Savings deposits. C) Coins. D) Checkable deposits. Show Answer Correct Answer: B) Savings deposits. 3. If a loan is repaid at a commercial bank then A) Money is destroyed. B) Commercial bank assets are increased. C) Money is created. D) Commercial bank assets are decreased. Show Answer Correct Answer: A) Money is destroyed. 4. When people can take their money with them easily A) Uniformity. B) Divisibility. C) Portability. D) Durability. Show Answer Correct Answer: C) Portability. 5. How long do $ 50 bills last? A) 4 years. B) 12 years. C) 6 years. D) 9 years. Show Answer Correct Answer: D) 9 years. 6. Paper currency issued by the Fed that replaced all other types of federal currency is also officially known as A) Federal Reserve Notes. B) Federal Primary Notes. C) U.S. minted coins. D) National paper finance. Show Answer Correct Answer: A) Federal Reserve Notes. 7. When a company "goes public" and sells stock on the public stock exchanges, this is called its ..... A) Initial Public Offering. B) Bond Allocation Series. C) Dividend Payment Layout. D) Growth Stock Fund. Show Answer Correct Answer: A) Initial Public Offering. 8. The exchange rate between Swiss Francs and Chinese Yuan is 1 to 7. Thus, which statement is true? A) The Swiss economy is 7 times larger than China's. B) 1 Yuan will buy 7 Francs. C) Francs cannot be traded for Yuan. D) 1 Franc will buy 7 Yuan. Show Answer Correct Answer: D) 1 Franc will buy 7 Yuan. 9. The total amount of cash the bank has in its vault A) Army reserves. B) Actual reserves. C) Excess reserves. D) Required reserves. Show Answer Correct Answer: B) Actual reserves. 10. Number of federal reserve districts A) 12. B) 10. C) 21. D) 5. Show Answer Correct Answer: A) 12. 11. Professionally managed group of investments bought using a pool money from investors: A) Bond. B) Asset. C) Stock. D) Mutual fund. Show Answer Correct Answer: D) Mutual fund. 12. Money is used to compare the marketvalue of different goods and services.A) Measure of ValueB) Store of ValueC) Medium of Exchange A) A. B) B. C) C. D) None of above. Show Answer Correct Answer: A) A. 13. How did FDR help restore faith in the banks? A) Created the FDIC. B) Paid people to go back to the banks. C) Bought all the banks himself. D) None of above. Show Answer Correct Answer: A) Created the FDIC. 14. Who owns our money? A) The President. B) Our government. C) We, the people. D) Legal citizens. Show Answer Correct Answer: B) Our government. 15. The market for money is like any other, and therefore the price for money-the interest rate-is high when the money supply is low and is low when the money supply A) Stays the same. B) Is large. C) Is low. D) None of the above. Show Answer Correct Answer: B) Is large. 16. The historical period following the fall of Rome is known as the ..... A) Enlightenment. B) Dark Ages. C) Stone Age. D) Golden Age. Show Answer Correct Answer: B) Dark Ages. 17. Which of the following is an example of fiat money? A) Hemp. B) A dollar bill. C) Tobacco. D) Gold. Show Answer Correct Answer: B) A dollar bill. 18. At the grocery store last week, you had to decide whether to buy the 14.5 oz. can of diced tomatoes for $ 1.75 or the 28 oz. can of diced tomatoesfor $ 2.55.A) Measure of ValueB) Store of ValueC) Medium of Exchange A) A. B) B. C) C. D) None of above. Show Answer Correct Answer: A) A. 19. RR = 50%, banks have excess reserves of 100, 000 dollars. What is the money creating potential of the entire banking system? A) 400, 000. B) 100, 000. C) 40, 000. D) 200, 000. Show Answer Correct Answer: D) 200, 000. 20. The Fed determines the amount of cash a bank must keep in its vault by raising or lowering the? A) Open market operations. B) Reserve ratio (requirement). C) Discount rate. D) Fed funds rate. Show Answer Correct Answer: B) Reserve ratio (requirement). 21. The amount we take out as a loan A) Stock. B) Interest. C) Principal. D) Portfolio. Show Answer Correct Answer: C) Principal. 22. The key word "save" describes which role of money? A) Unit of account/standard of value. B) Store of value. C) Medium of exchange. D) None of above. Show Answer Correct Answer: B) Store of value. 23. High powered money consists of: A) Currency and coins held by the public. B) Currency and demand deposits. C) Currency, cash reserves with banks and demand deposits. D) Currency held by the public and cash reserves with banks. Show Answer Correct Answer: D) Currency held by the public and cash reserves with banks. 24. Why are funds in checking accounts called demand deposits? A) They are available whenever the depositor demands them by writing a check. B) They are not liquid. C) They are usually in great demand. D) They are held without interest by the bank. Show Answer Correct Answer: A) They are available whenever the depositor demands them by writing a check. 25. Currently, what is U.S. money backed by? A) Trust that it is worth something. B) Silver. C) Frankincense. D) Gold. Show Answer Correct Answer: A) Trust that it is worth something. 26. When Daniel goes to the mall and looks over the goods and services offered for sale he understands the value of each item because it is communicated on the price tag. Here money is being used as a A) Store of Value. B) Medium of Exchange. C) Standard of Value. D) Change Maker. Show Answer Correct Answer: C) Standard of Value. 27. Today, governments that want to spend more than they have ..... A) Can only get it by taxing their citizens. B) Can only get it by borrowing. C) Can print more money. D) Are out of luck. Show Answer Correct Answer: C) Can print more money. 28. Medium of exchange: A) Money is accepted in exchange for goods/services. B) Money is a measurement of value. C) Money can maintain value over time. D) None of above. Show Answer Correct Answer: A) Money is accepted in exchange for goods/services. 29. This is money that has another useful purpose. A) Securities. B) Commodity. C) Fiat. D) Debt. Show Answer Correct Answer: B) Commodity. 30. Amount held bank: A) Required Reserve Rate Changes. B) Open Market Operations. C) Discount Rate Changes. D) Interest Rate Paid on Reserves. Show Answer Correct Answer: A) Required Reserve Rate Changes. ← PreviousNext →Related QuizzesFinance QuizzesEconomics QuizzesMoney Quiz 1Money Quiz 2Money Quiz 4Money Quiz 5Money Quiz 6Money Quiz 7Money Quiz 8Money Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books