Glendale Community College » Economics » Econ 102 - Principles of Macroeconomics » Winter 2021

Question #1

An item that is exchanged for a good or service describes

A. a medium of exchange

B. a unit of account

C. store of value

D. financial intermediary

Question #2

Which of the following is an example of commodity money?

A. cigarettes

B. notes declared to be legal tender

C. digital currency

D. credit cards

Question #3

If the reserve requirement is 20%, what is the money multiplier?

A. 20

B. 5

C. 6

D. 4

Question #4

A person deposits $400 into the bank. The reserve requirement is 10%. How much money is created?

A. $4,000

B. $3,600

C. $40

D. $360

Question #5

The Federal Reserve purchases $500,000 in government bonds. The reserve requirement is 25%. How much money is created?

A. $4,500,000

B. $5,000,000

C. $2,000,000

D. $1,500,000