Mini Lecture: Money And The Economy

Question 1

Each dollar in the US is spent about _____ times in a year.

Answer 1

9

Question 2

The number of times a dollar is spent is called the what?

Answer 2

Velocity of money

Question 3

The position of monetarists is that an economy needs only enough money to achieve what?

Answer 3

Full employment

Question 4

Too much money leads to ___________, and too little money leads to _____________.

Answer 4

Inflation

Unemployment

Question 5

Money (M-1) includes coins and currency plus _________ _________.

Answer 5

Demand deposits

Question 6

Demand deposits are what?

Answer 6

Checking deposits

Question 7

Personal M-1 is the balance in your ___________ account plus any coin and currency you’re carrying with you.

Answer 7

Checking

Question 8

When you deposit currency into a checking account it’s still M-1 but no longer in _____________. Therefore not money anymore.

Answer 8

Circulation

Question 9

Bonds earn _______ profit than loans because there is no risk of default on a US government bond issue.

Answer 9

Less

Question 10

Most people do not use what in transactions?

Answer 10

Currency

Question 11

Money is created by what two things?

Answer 11

Depositing and lending

Question 12

The Federal Reserve System has the authority to look out for the good of the whole ____________.

Answer 12

Economy