A.   fiat money

B.   legal tender

C.   a medium of exchange

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

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

A.   legal tender

B.   debts, or promises to pay

C.   assets of the Federal Reserve Banks

D.   token money

A.   20%

B.   14.14%

C.   16.67%

D.   25%

A.   increase the purchasing power of money

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

C.   decrease the conversion of money to gold

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

A.   uses price and wage controls

B.   buys corporate stock

C.   controls the money supply

D.   employs fiscal policy

A.   publicly owned but privately controlled

B.   publicly owned and controlled

C.   privately owned and controlled

D.   privately owned but publicly 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.   acting as the fiscal agent for the federal government and issuing currency

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

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

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

A.   overstating the moral hazard problem

B.   overestimating the expected profits made by oil companies

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

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

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

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

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

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

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

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

C.   issuing receipts for the gold stored with them

D.   accepting deposits of gold for safe storage

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

B.   protect the deposits in the commercial bank against losses

C.   provide the Fed with a means of controlling the lending ability of the commercial 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.   Internal Revenue Service

C.   Congress of the United States

D.   Federal Reserve

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

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

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

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

A.   open-market operations

B.   the reserve ratio

C.   the discount rate

D.   interest on reserves

A.   increases the amount of excess reserves banks must keep

B.   changes required reserves to excess reserves

C.   decreases the discount rate

D.   increases the discount rate

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

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

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

D.   banks charge for loans to the most creditworthy customers

A.   a restrictive monetary policy

B.   a prime interest rate policy

C.   an expansionary monetary policy

D.   a discretionary fiscal policy

A.   selling government securities and lowering the discount rate

B.   buying government securities and lowering the reserve ratio

C.   buying government securities and lowering the discount rate

D.   selling government securities and raising the discount rate

A.   government spending

B.   tax rates

C.   investment spending

D.   the imports of the economy

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

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

A.   Janet Yellen

B.   Ben Bernanke

C.   Alan Greenspan

D.   Jerome Powell