Chapter 11

Question 1

Barter represents a great technological improvement over coins and other forms of cash.

true
false

Answer 1

false

Question 2

Only money can serve as a store of value.

true
false

Answer 2

false

Question 3

Money is always a good store of value.

true
false

Answer 3

false

Question 4

If gold is being used for money, an increase in the supply of gold will cause

the price of gold to increase.

a decrease in the money supply.

the price of gold to remain constant.

the price of all other goods to fall.

an increase in the price of all other goods.

Answer 4

an increase in the price of all other goods.

Question 5

The U.S. dollar is not backed by any precious metal or commodity.

true
false

Answer 5

true

Question 6

Which of the following would not be counted as part of M1?

time deposits

savings deposits

coins

paper money

checking deposits

Answer 6

time deposits

Question 7

A major problem with using cryptocurrencies as a primary medium exchange is

the requirement of a constant internet connection.

government laws prohibiting the purchase and sale of cryptocurrencies.

the fact that it is not backed by gold.

their lack of a physical version.

the volatility in their values.

Answer 7

the volatility in their values.

Question 8

All of the following are functions of money except:

an exchange of purchasing power

All of the above are functions of money.

a store of value

a unit of account

a medium of exchange

Answer 8

an exchange of purchasing power