CHAPTER 12
Money and Banking
1. To say money is socially defined means that:
A) money has been defined in a Constitutional amendment.
B) whatever performs the functions of money extremely well is considered to be money.
C) the money supply includes all public and private securities purchased by society.
D) society, acting through Congress, specifies what shall be included in the money supply.
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2. Money functions as:
A) a store of value. B) a unit of account. C) a medium of exchange. D) all of the above.
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9. When economists say that money serves as a medium of exchange, they mean that it is:
A) a way to keep wealth in a readily spendable form for future use.
B) a means of payment.
C) a monetary unit for measuring and comparing the relative values of goods.
D) declared as legal tender by the government.
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10. When economists say that money serves as a unit of account, they mean that it is:
A) a way to keep wealth in a readily spendable form for future use.
B) a means of payment.
C) a monetary unit for measuring and comparing the relative values of goods.
D) declared as legal tender by the government.
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12. The paper money used in the United States is:
A) National Bank Notes. C) United States Notes.
B) Treasury Notes. D) Federal Reserve Notes.
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16. The money supply is backed:
A) by the government's ability to control the supply of money and therefore to keep its value relatively
stable.
B) by government bonds.
C) dollar-for-dollar with gold and silver.
D) dollar-for-dollar with gold bullion.
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