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. store of value

B. a medium of exchange

C. financial intermediary

D. a unit of account

Question #2

Which of the following is an example of commodity money?

A. notes declared to be legal tender

B. credit cards

C. digital currency

D. cigarettes

Question #3

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

A. 5

B. 4

C. 20

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. $360

D. $3,600

Question #5

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

A. $1,500,000

B. $2,000,000

C. $4,500,000

D. $5,000,000