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1
The group responsible for setting policy on buying and selling government securities (bills, notes, and bonds) is the:
A)Securities and Exchange Commission.
B)U.S. Treasury Board.
C)Federal Open Market Committee.
D)12 Federal Reserve Bank presidents.
2
Other things equal, a dramatic decrease in the money supply would:
A)increase the price level.
B)reduce the purchasing power of each dollar.
C)increase the purchasing power of each dollar.
D)have an ambiguous impact on the purchasing power of each dollar.
3
Which of the following most accurately describes the primary cause of the 2007-2008 U.S. financial crisis?
A)A rapid increase in the size of the federal deficit
B)Widespread defaults on home mortgages precipitated by banks' lax lending practices
C)A sharp reduction in the money supply by the Federal Reserve Bank
D)The rapid collapse in the stock market
4
The purchasing power of the dollar:
A)increases with the rate of inflation.
B)is inversely related to the price level.
C)is directly related to the supply of money.
D)is directly related to the price level.
5
Which of the following is included in M2 but not M1?
A)Currency held by banks
B)Small-denominated time deposits (less than $100,000)
C)Credit card balances
D)Large time deposits (at least $100,000)
6
In the U.S., there are:
A)50 Federal Reserve Districts corresponding to the 50 states.
B)7 Federal Reserve Districts corresponding to the 7 members of the Board of Governors.
C)12 Federal Reserve Districts corresponding to the 12 Federal Reserve Banks.
D)6 Federal Reserve Banks corresponding to the 6 U.S. time zones.
7
Writing a check to purchase a new computer is an example of using money primarily as a:
A)unit of account.
B)standard of value.
C)medium of exchange.
D)store of value.
8
Whenever the Jones family receives change from a purchase, it goes into a jar to be used in the summer as spending money for the family vacation. The primary function served by the money in the jar is:
A)standard of value.
B)store of value.
C)unit of account.
D)medium of exchange.
9
Use the following to answer the next question:

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Refer to the table. The size of the M2 money supply is:
A)$2,950 billion.
B)$4,850 billion.
C)$4, 875 billion.
D)$6,275 billion.
10
The U.S. money supply is "backed" by:
A)gold.
B)silver.
C)a joint committee of the Federal Deposit Insurance Corporation and the National Credit Union Administration.
D)the ability of the government to maintain its value.







McConnell Macroecon 19eOnline Learning Center

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