Money Quiz 23 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. The ability to use an asset as a medium of exchange describes its .....

Correct Answer: D) Liquidity.

2. Maria borrowed $ 3, 000 at a simple interest rate of 4% per year. How much did she have to repay after 4 years?

Correct Answer: B) $ 3, 480.

3. Examples of this would include salt, precious stones, gold, and livestock.

Correct Answer: A) Commodity Money.

4. Suppose that Captain Crunch bank has a customer deposit $ 5, 000 and the bank's excess reserves go up by $ 4, 000. The reserve ratio is

Correct Answer: C) 20%.

5. The interest rate the Banks charges charge their best customers.

Correct Answer: C) Prime rate.

6. What would decreasing reserve requirements allow a bank to do?

Correct Answer: A) Free up banks to make more loans.

7. A prolonged period of falling stock prices and a general feeling of investor pessimism:

Correct Answer: B) Bear market.

8. Maximum credit that commercial bank can legally create depends on their

Correct Answer: B) Legal reserve ratio( LRR).

9. The chance of loss.

Correct Answer: C) Risk.

10. ..... is money that is deemed legal tender by the government, and it is not based on or convertible into a commodity.

Correct Answer: C) Fiat money.

11. Scarcity is important as an economic characteristic of money because .....

Correct Answer: B) Too much money in circulation makes it worth less.

12. Buying and selling of government securities by the central bank from/to banks is called?

Correct Answer: A) Open market operations.

13. Stocks of large, well-established corporations with a solid record of profitability:

Correct Answer: A) Blue-chip stocks.

14. When one share is divided into half or more (because the price has increased and deterred investors)

Correct Answer: A) Stock Split.

15. ..... is a bank that can lend money to other banks in times of crisis

Correct Answer: B) Central Bank.

16. A bond will increase in value if

Correct Answer: A) Interest rates decrease.

17. This type of money is considered legal tender and gets its value from the people's faith in the government.

Correct Answer: C) Fiat money.

18. Which of the following is NOT one of the characteristics of money?

Correct Answer: D) Affordable.

19. Collects, borrows, spends, and prints money

Correct Answer: C) Treasury Department.

20. Any action taken by the Federal Reserve that either speeds up or slows down the economy is referred to as ..... ?

Correct Answer: A) Monetary Policy.