A.   a medium of exchange

B.   legal tender

C.   fiat money

D.   token money

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

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

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

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

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

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

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

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

A.   legal tender

B.   token money

C.   debts, or promises to pay

D.   assets of the Federal Reserve Banks

A.   14.14%

B.   16.67%

C.   20%

D.   25%

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

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

C.   decrease the conversion of money to gold

D.   increase the purchasing power of money

A.   employs fiscal policy

B.   uses price and wage controls

C.   buys corporate stock

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.   federal government as does the U.S. Treasury

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

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

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

A.   overestimating the expected profits made by oil companies

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

C.   overstating the moral hazard problem

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

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

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

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

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

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

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

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

A.   U.S. Treasury

B.   Federal Reserve

C.   Internal Revenue Service

D.   Congress of the United States

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

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

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

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

A.   the reserve ratio

B.   the discount rate

C.   open-market operations

D.   interest on reserves

A.   increases the amount of excess reserves banks must keep

B.   decreases the discount rate

C.   changes required reserves to excess reserves

D.   increases the discount rate

A.   banks charge for loans to the most creditworthy customers

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

A.   an expansionary monetary policy

B.   a prime interest rate policy

C.   a discretionary fiscal 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.   government spending

B.   investment spending

C.   the imports of the economy

D.   tax rates

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

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

C.   a decrease in the federal funds rate and an increase 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