Eco Test

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  • Published : November 27, 2011
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* Question 1
4 out of 4 points
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| M2 consists ofAnswer| | | |
| Selected Answer:|    M1 plus amounts in savings accounts, money-market mutual funds (held by individuals), and small time deposits (under $100,000).| Correct Answer:|    M1 plus amounts in savings accounts, money-market mutual funds (held by individuals), and small time deposits (under $100,000).|

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* Question 2
0 out of 4 points
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| A mechanism by which a short-term loan is made, allowing a shopper to purchase goods or services today and pay at a later date, is known as a ________ card.Answer| | | | | Selected Answer:|    debit|

Correct Answer:|    credit|
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* Question 3
4 out of 4 points
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| A type of inside money that allows a shopper to prepay some amount and then spend it at will is a ________ card.Answer| | | | | Selected Answer:|    stored-value|
Correct Answer:|    stored-value|
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* Question 4
0 out of 4 points
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| A weighted average of the components of M1 and M2, with the weights dependent on the interest rates of each component, is known asAnswer| | | | | Selected Answer:|    a simple-sum monetary aggregate.| Correct Answer:|    a Divisia monetary aggregate.|

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* Question 5
0 out of 4 points
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| Money created in the private sector, such as checking accounts at banks, isAnswer| | | | | Selected Answer:|    outside money.|
Correct Answer:|    inside money.|
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* Question 6
4 out of 4 points
| |
| Dividing the amount of U.S. currency in circulation by the number of people in the United States shows that, on average, each person holds over $2,000 in cash.  The most important explanation for this remarkably large sum isAnswer| | | | | Selected Answer:|    most is circulating in foreign countries.| Correct Answer:|    most is circulating in foreign countries.|

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* Question 7
4 out of 4 points
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| A Divisia monetary aggregate isAnswer| | | |
| Selected Answer:|    a weighted average of the components of M1 and M2, with the weights depending on the interest rates of each component.| Correct Answer:|    a weighted average of the components of M1 and M2, with the weights depending on the interest rates of each component.|

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* Question 8
0 out of 4 points
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| U.S. currency is currentlyAnswer| | | |
| Selected Answer:|    inside money.|
Correct Answer:|    fiat money.|
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* Question 9
4 out of 4 points
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| Money created by the government or by nature is calledAnswer| | | | | Selected Answer:|    outside money.|
Correct Answer:|    outside money.|
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* Question 10
0 out of 4 points
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| The law states that a lender must accept money in the repayment of debts, which means that money isAnswer| | | | | Selected Answer:|    the medium of exchange.|
Correct Answer:|    legal tender.|
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* Question 11
4 out of 4 points
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| You are considering buying a discount bond that costs $1,000 today and pays you $1,200 in one year.  However, there is a 10 percent chance that the company issuing the bond will go bankrupt and not pay you your interest or return your principal.  What is the expected return on the bond?Answer| | | | | Selected Answer:|    8 percent.|

Correct Answer:|    8 percent.|
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* Question 12
0 out of 4 points
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| Consider a two-year coupon bond that has a present value of $10,000.  If the rate of discount is 3 percent, and the payment made at the end of each year is $300, the principal amount to be repaid at the end of two years isAnswer| | | | | Selected Answer:|    $10,300.00.|

Correct Answer:|    $10,000.00.|
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* Question 13
0 out of 4 points
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| Consider a coupon bond that pays $105 every year and repays...
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