#1
Which of the following is included in M2 but not in M1?
Currency in circulation
Savings deposits
Demand deposits
Traveller's checks
#2
Which monetary aggregate includes all of M1 plus savings deposits, time deposits, and certain other liquid assets?
#3
Which of the following is NOT a characteristic of money?
Durability
Divisibility
Liquidity
Intrinsic value
#4
Which of the following is an example of a financial intermediary?
Commercial bank
Investment bank
Central bank
Credit union
#5
What is the main purpose of the fractional reserve system?
To ensure banks hold a fraction of their deposits in reserves
To allow banks to lend out all of their deposits
To stabilize the money supply
To prevent bank runs
#6
Which of the following is an example of open market operations by a central bank?
Buying government securities from banks
Setting the discount rate
Regulating reserve requirements
Printing more currency
#7
Which of the following is NOT a function of money?
Medium of exchange
Unit of account
Store of value
Facilitator of barter
#8
What is the primary tool used by central banks to manage the money supply?
Open market operations
Fiscal policy
Foreign exchange interventions
Discount rate adjustments
#9
Which of the following is a measure of financial liquidity?
Debt-to-equity ratio
Current ratio
Return on investment
Earnings per share
#10
Which of the following is true about the velocity of money?
It is constant over time
It measures how quickly money circulates in the economy
It is inversely related to the money supply
It is not influenced by interest rates
#11
Which of the following is considered a near-money?
Currency in circulation
Checking deposits
Savings deposits
Time deposits
#12
In the context of monetary aggregates, what does the term 'near-money' refer to?
Assets that can be easily converted into cash
Assets that are not included in the money supply
Assets that are not commonly used for transactions
Assets that are not backed by the government
#13
What happens to the money supply when the central bank sells government securities in the open market?
Money supply increases
Money supply decreases
No change in money supply
Money supply fluctuates
#14
Which monetary aggregate includes M2 plus large time deposits, institutional money market funds, and short-term repurchase agreements?
#15
What is the Fisher effect in economics?
A theory that states that nominal interest rates adjust to changes in the inflation rate
A theory that explains the relationship between real interest rates and investment
A theory that describes how changes in the money supply affect the price level
A theory that predicts the impact of government spending on economic growth
#16
What is the equation of exchange in economics?
MV = PQ
PY = MV
PY = VT
MV = TY
#17
What is the relationship between the money multiplier and the reserve ratio?
Inverse
Direct
Exponential
Nonlinear