In a less-developed economy, cattle is widely accepted as payment for goods and services. Nearly all goods and services are priced in terms of cattle; however, cows vary in quality, become less valuable with age, and are difficult to move over long distances. Which of the following functions of money do cattle provide? Select the two correct answers.     portability   uniformity   medium of exchange   unit of account   store of value

In general, when there is less competition in the banking sector ( a lower supply of firms),     nominal interests rates decrease, which makes it easier for business owners to obtain a loan.     inflation decreases, which is better for the economy as a whole.     nominal interest rates increase, which is good for businesses.     nominal interest rates increase, making it more difficult for business owners to obtain loans, which is bad for the economy as a whole.

Which of the following are true of a barter economy? Check all that apply. The transaction costs of exchanges are lower in a barter economy than in a money economy. Average living standards can be expected to be lower in a barter economy than in a money economy. Money evolved out of a barter economy as traders sought to make trading easier.

Attempt the following multiple choice questions: 1. The velocity of money represents: (a) Whether individuals are increasing or decreasing the quantity of money spent in an economy (b) The quantity of money available in an economy (c) The level of prices determined by the equation of exchange (d) How often money is used in a specific period of time (e) Whether currency is accepted as a medium of exchange in an economy 2. According to the quantity theory of money, (a) Increases in the money supply will lead to inflation, ceteris paribus (b) The level of inflation is independent of the money supply (c) The money supply times the velocity equals the real GDP (d) When real GDP rises, the money supply must fall by the same proportion (e) The velocity of money is assumed to fluctuate widely over time 3. Monetarists differ from Classical economists in their view of money in that monetarists believe: (a) The velocity of money is relatively constant over time (b) Prices are not influenced by…

Economists have documented Pacific island economies in which large rocks and boulders were used as money.  While this may work for a group of people who only transact with others on the island, the rocks would not be a useful form of money in the world economy because:   A. Large rocks are not easily standardized   B. Large rocks are not easily divisible   C. Large rocks are not easy to carry   D. All of the above are true

The banking industry A) should have an efficiency advantage in gathering information that would eliminate the need for the money markets. B) exists primarily to mediate the asymmetric information problem between saver-lenders and borrower-spenders. C) is subject to more regulations and governmental costs than the money markets. D) all of the above are true. E) only A and B of the above are true.

A decrease in the demand for bitcoin has the immediate effect of and the subsequent effect of increasing; increasing the marginal cost of producing bitcoin increasing: increasing the supply of bitcoin decreasing; decreasing the marginal cost of producing bitcoin decreasing; decreasing the supply of bitcoin the purchasing power of bitcoin

The main functions of the financial system include: Provide a means of making payments. Prepare to sacrifice some income to avoid uncertainty. Assist borrowing and lending. All of the above

The central bank buys $10,000 worth of bonds in the open market from Elaine, who deposits the proceeds in her checking account at MSM Bank. The required reserve ratio is 5%. (a) What is the amount by which MSM Bank’s liabilities have changed? Explain. (b) Calculate the change in required reserves for MSM Bank. Show your work. (c) What is the dollar value of the maximum amount of new loans MSM Bank can initially make as a result of Elaine’s deposit? Explain. (d) Based on the central bank’s open-market purchase of bonds, calculate the maximum amount by which the money supply can change throughout the banking system. Show your work. (e) How will the change in the money supply in part (d) affect aggregate demand and the price level in the short run? Explain.

The Bank of Canada wishes to reduce the money supply, implementing a tight monetary policy. Which of the following is NOT consistent with this goal? (A) Reducing the reserve requirement for banks. (B) Selling government bonds. (C) Increasing the target for the overnight rate. (D) Printing less currency