A.   legal tender

B.   fiat money

C.   a medium of exchange

D.   token money

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

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

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

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

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

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

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

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

A.   assets of the Federal Reserve Banks

B.   debts, or promises to pay

C.   legal tender

D.   token money

A.   16.67%

B.   14.14%

C.   20%

D.   25%

A.   increase the purchasing power of money

B.   decrease the conversion of money to gold

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

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

A.   controls the money supply

B.   employs fiscal policy

C.   uses price and wage controls

D.   buys corporate stock

A.   publicly owned but privately controlled

B.   privately owned but publicly controlled

C.   publicly owned and controlled

D.   privately owned and controlled

A.   the public as do commercial banks and thrifts

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

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

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

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

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

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

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

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

B.   overstating the moral hazard problem

C.   overestimating the expected profits made by oil companies

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

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

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

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

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

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

B.   accepting deposits of gold for safe storage

C.   issuing receipts for the gold stored with them

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

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

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

C.   protect the deposits in the commercial bank against losses

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

A.   Congress of the United States

B.   Internal Revenue Service

C.   Federal Reserve

D.   U.S. Treasury

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

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

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

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

A.   interest on reserves

B.   the discount rate

C.   open-market operations

D.   the reserve ratio

A.   increases the amount of excess reserves banks must keep

B.   increases the discount rate

C.   changes required reserves to excess reserves

D.   decreases the discount rate

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

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

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

D.   banks charge for loans to the most creditworthy customers

A.   an expansionary monetary policy

B.   a restrictive monetary policy

C.   a discretionary fiscal policy

D.   a prime interest rate policy

A.   selling government securities and lowering the discount rate

B.   selling government securities and raising 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.   investment spending

C.   government spending

D.   the imports of the economy

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

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

A.   Ben Bernanke

B.   Janet Yellen

C.   Jerome Powell

D.   Alan Greenspan