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. financial intermediary

B. store of value

C. a unit of account

D. a medium of exchange

Question #2

Which of the following is an example of commodity money?

A. notes declared to be legal tender

B. digital currency

C. credit cards

D. cigarettes

Question #3

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

A. 20

B. 5

C. 4

D. 6

Question #4

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

A. $4,000

B. $40

C. $3,600

D. $360

Question #5

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

A. $2,000,000

B. $4,500,000

C. $5,000,000

D. $1,500,000