A.   token money

B.   legal tender

C.   a medium of exchange

D.   fiat money

A.   No, because the card transactions are not insured by either the Federal Reserve banks or the U.S. Treasury.

B.   Yes, because their value is included in the calculation of M 1.

C.   Yes, because their value is included in the calculation of M 2.

D.   No, because they provide a short-term loan to cardholders from a financial institution that issued the card.

A.   the willingness of banks and the government to surrender something of value in exchange for money

B.   the gold bullion that is stored in Fort Knox, Kentucky

C.   the belief of holders of money that it can be exchanged for desirable goods and services

D.   the confidence of the public in the ability of government to pay off the national debt

A.   debts, or promises to pay

B.   legal tender

C.   token money

D.   assets of the Federal Reserve Banks

A.   16.67%

B.   20%

C.   25%

D.   14.14%

A.   increase the use of money as a measure of value

B.   increase the purchasing power of money

C.   decrease the conversion of money to gold

D.   decrease the use of money as a medium of exchange

A.   buys corporate stock

B.   employs fiscal policy

C.   uses price and wage controls

D.   controls the money supply

A.   publicly owned but privately controlled

B.   publicly owned and controlled

C.   privately owned but publicly controlled

D.   privately owned and controlled

A.   the public as do commercial banks and thrifts

B.   commercial banks and thrifts as those institutions do for the public

C.   commercial banks and thrifts as does the Federal Deposit Insurance Corporation

D.   federal government as does the U.S. Treasury

A.   supervising the operation of banks to make sure they follow regulations and monitoring banks so they do not engage in fraud

B.   handling the Fed's collection of checks and adjusting legal reserves among banks

C.   setting the Fed's monetary policy and directing the buying and selling of government securities

D.   acting as the fiscal agent for the federal government and issuing currency

A.   underestimating the risk of losses on mortgage-backed securities

B.   overstating the moral hazard problem

C.   overestimating the expected profits made by oil companies

D.   understating the benefits of devaluing the U.S. dollar

A.   set up the primary dealer credit facility (PDCF)

B.   set up the commercial paper funding facility (CPFF)

C.   set up the money market investor funding facility (MMIFF)

D.   set up the Troubled Asset Relief Program (TARP)

A.   issuing paper money in excess of the amount of gold stored with them

B.   accepting deposits of gold for safe storage

C.   using deposited gold to produce products for sale to others

D.   issuing receipts for the gold stored with them

A.   protect the deposits in the commercial bank against losses

B.   provide the Fed with a means of controlling the lending ability of the commercial bank

C.   add to the liquidity of the commercial bank and protect it against a "run" on the bank

D.   provide the means by which checks drawn on the commercial bank and deposited in other commercial banks can be collected

A.   U.S. Treasury

B.   Federal Reserve

C.   Congress of the United States

D.   Internal Revenue Service

A.   The supply of money is directly related to the interest rate.

B.   Bond prices and the interest rate are directly related.

C.   The total demand for money is inversely related to the interest rate.

D.   A lower interest rate raises the opportunity cost of holding money.

A.   open-market operations

B.   the discount rate

C.   the reserve ratio

D.   interest on reserves

A.   changes required reserves to excess reserves

B.   increases the discount rate

C.   decreases the discount rate

D.   increases the amount of excess reserves banks must keep

A.   banks charge for overnight use of excess reserves held at the Federal Reserve banks

B.   is charged for government bonds sold in the open market operations of the Federal Reserve

C.   the Federal Reserve charges for short-term loans to commercial banks

D.   banks charge for loans to the most creditworthy customers

A.   an expansionary monetary policy

B.   a discretionary fiscal policy

C.   a prime interest rate policy

D.   a restrictive monetary policy

A.   selling government securities and raising the discount rate

B.   selling government securities and lowering the discount rate

C.   buying government securities and lowering the reserve ratio

D.   buying government securities and lowering the discount rate

A.   tax rates

B.   government spending

C.   the imports of the economy

D.   investment spending

A.   an increase in the federal funds rate and an increase in the money supply

B.   a decrease in the federal funds rate and an increase in the money supply

C.   a decrease in the federal funds rate and a decrease in the money supply

D.   an increase in the federal funds rate and a decrease in the money supply

A.   Janet Yellen

B.   Alan Greenspan

C.   Jerome Powell

D.   Ben Bernanke