A.   a medium of exchange

B.   token money

C.   legal tender

D.   fiat money

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

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

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

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

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 gold bullion that is stored in Fort Knox, Kentucky

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

A.   token money

B.   assets of the Federal Reserve Banks

C.   legal tender

D.   debts, or promises to pay

A.   14.14%

B.   20%

C.   25%

D.   16.67%

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

B.   increase the purchasing power of money

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

D.   decrease the conversion of money to gold

A.   controls the money supply

B.   uses price and wage controls

C.   buys corporate stock

D.   employs fiscal policy

A.   publicly owned but privately controlled

B.   privately owned but publicly controlled

C.   privately owned and controlled

D.   publicly owned and controlled

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

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.   the public as do commercial banks and thrifts

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

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

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

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

A.   overestimating the expected profits made by oil companies

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

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

D.   overstating the moral hazard problem

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

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

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

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

A.   issuing receipts for the gold stored with them

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

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

D.   accepting deposits of gold for safe storage

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

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

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

D.   protect the deposits in the commercial bank against losses

A.   Congress of the United States

B.   U.S. Treasury

C.   Federal Reserve

D.   Internal Revenue Service

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

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

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

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

A.   the reserve ratio

B.   the discount rate

C.   open-market operations

D.   interest on reserves

A.   decreases the discount rate

B.   increases the amount of excess reserves banks must keep

C.   increases the discount rate

D.   changes required reserves to excess reserves

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.   banks charge for loans to the most creditworthy customers

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

A.   a restrictive monetary policy

B.   an expansionary monetary policy

C.   a discretionary fiscal policy

D.   a prime interest rate policy

A.   selling government securities and lowering the discount rate

B.   buying government securities and lowering the discount rate

C.   selling government securities and raising the discount rate

D.   buying government securities and lowering the reserve ratio

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.   Jerome Powell

B.   Ben Bernanke

C.   Alan Greenspan

D.   Janet Yellen