This quiz works best with JavaScript enabled. Home > Economics > Finance > General > Money – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Since bonds are considered among the safest investments, you would expect that they would A) Mature quickly. B) Have high interest rates. C) Take a long time to mature. D) None of the above. Show Answer Correct Answer: C) Take a long time to mature. 2. Trading something for something else-no currency involved A) Demand. B) Barter. C) Goods. D) Market. Show Answer Correct Answer: B) Barter. 3. When the Federal Reserve works to lower inflation rates by decreasing the money supply and slowing down the economy A) Expansionary Monetary Policy. B) Contractionary Monetary Policy. C) Easy Money Policy. D) Monetary Policy. Show Answer Correct Answer: B) Contractionary Monetary Policy. 4. Which of the following is not a function of the central bank? A) Managing monetary policy. B) Controlling money supply. C) Lender of last resort. D) Accepting deposits. Show Answer Correct Answer: D) Accepting deposits. 5. One dollar and five dollar bills that are in circulation last about 2 years. How long do $ 20 bills last? A) 10 years. B) 8 years. C) 6 years. D) 4 years. Show Answer Correct Answer: D) 4 years. 6. Which of the following statements about M1 Assests is true? A) M1 assets do not have liquidity. B) M1 assets cannot be converted easily into cash. C) M1 assets are stored in savings accounts. D) M1 assets can be converted into cash easily. Show Answer Correct Answer: D) M1 assets can be converted into cash easily. 7. Which part of the Fed sets monetary policy? A) Board of Governors. B) Federal Open Market Committee. C) Reserve Banks. D) None of above. Show Answer Correct Answer: B) Federal Open Market Committee. 8. Money loses its value when it A) Is durable. B) It becomes too plentiful. C) Becomes too portabale. D) Is divisible. Show Answer Correct Answer: B) It becomes too plentiful. 9. Which of the following refers to checks that have been written but not cashed? A) Cancelled check. B) Demand deposits. C) Outstanding checks. D) Bank statements. Show Answer Correct Answer: C) Outstanding checks. 10. This characteristic of money refers to the ability to carry it with you ..... lightweight and easy to transport. A) Acceptability. B) Portability. C) Stability. D) Uniformity. Show Answer Correct Answer: B) Portability. 11. The price paid for borrowed money A) Interest. B) Mortgage. C) Loan. D) Barter. Show Answer Correct Answer: A) Interest. 12. The Texas real estate market is a market that is categorized in which two ways? A) By business. B) By price. C) By consumer. D) By location. Show Answer Correct Answer: D) By location. 13. The ..... is the percentage of bank deposits that the bank must keep in its vault A) Actual ratio. B) Spending mutliplier. C) Fifteen percent rule. D) Reserve ratio. Show Answer Correct Answer: D) Reserve ratio. 14. The total collection of pieces of property that serve to store value is a person's A) Money. B) Wealth. C) Credit. D) Income. Show Answer Correct Answer: B) Wealth. 15. Rising prices means the value of money is ..... A) Going up. B) Unchanged. C) Going down. D) Irrelevant. Show Answer Correct Answer: C) Going down. 16. The type of money that HAS VALUE ON ITS OWN(Example:Precious metals) A) Commodity money. B) Representative Money. C) HOLLER MY DOLLER. D) Fiat money. Show Answer Correct Answer: A) Commodity money. 17. The following is information about the central bank and its description:As with households, governments need a bank account and the central bank fulfills this function. A) The sole issuer of notes and coins. B) The government's bank. C) The bankers' bank. D) Lender of last resort. Show Answer Correct Answer: B) The government's bank. 18. An increase in interest rates might ..... saving because more can be earned in interest income. A) Encourage. B) Discourage. C) Disallow. D) Invalidate. Show Answer Correct Answer: A) Encourage. 19. When an individual is unable to repay a loan A) Liquidity. B) Default. C) Interest. D) Speculation. Show Answer Correct Answer: B) Default. 20. Which of the following is not a function of a commercial bank? A) Controlling money supply. B) Accepting deposits. C) Credit creation. D) Making advances. Show Answer Correct Answer: A) Controlling money supply. 21. Which of the following statements is true? A) Money is a medium of exchange. B) Money is a unit of account. C) Money serves as a store of value. D) All of the above. Show Answer Correct Answer: D) All of the above. 22. ..... is a flow of earnings per unit of time. A) Money. B) Wealth. C) Currency. D) Income. Show Answer Correct Answer: D) Income. 23. This type of money is valuable because it is made of something valuable. A) Commodity money. B) Representative money. C) Fiat money. D) None of above. Show Answer Correct Answer: A) Commodity money. 24. If you're not using money to pay for goods or services, you're likely using this: A) Barter system. B) Credit system. C) Trade system. D) I owe you system. Show Answer Correct Answer: A) Barter system. 25. Functions of Banks include all of the following EXCEPT: A) Storing and saving money. B) Loans. C) Mortgages. D) Tax customers. Show Answer Correct Answer: D) Tax customers. 26. Which of the following is a function of money? A) Acceptability. B) Relatively scarce. C) Medium of exchange. D) Portability. Show Answer Correct Answer: C) Medium of exchange. 27. ..... is a sudden rush by depositors to withdraw their deposited funds from banks. A) Bank run. B) Demand deposit. C) Electronic funds transfer. D) Fiat. Show Answer Correct Answer: A) Bank run. 28. Even when fiscal policy changes are enacted, it takes time for the changes to takeEffect. This is known as the ..... effect. A) Sloth. B) Lag. C) Deficient. D) Slow. Show Answer Correct Answer: B) Lag. 29. This term refers to the ease with which you can convert an asset to cash with little or no loss of purchasing power. A) Uniformity. B) Legal tender. C) Acceptability. D) Liquidity. Show Answer Correct Answer: D) Liquidity. 30. Commercial bank create credit money by way of ..... A) Time deposit. B) Treasury Bill. C) Bill of Exchange. D) Demand deposit. Show Answer Correct Answer: D) Demand deposit. ← PreviousNext →Related QuizzesFinance QuizzesEconomics QuizzesMoney Quiz 1Money Quiz 2Money Quiz 3Money Quiz 4Money Quiz 6Money Quiz 7Money Quiz 8Money Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books