#1
Which of the following is NOT a function of money in an economy?
Medium of exchange
Store of value
Unit of labor
Unit of account
#2
What is the primary tool used by central banks to influence the money supply?
Fiscal policy
Interest rates
Currency pegging
Trade policy
#3
Which of the following is NOT a characteristic of fiat money?
Backed by a commodity like gold
Value determined by government decree
No intrinsic value
Widely accepted as a medium of exchange
#4
What is the term for the interest rate at which banks lend money to each other overnight?
Prime rate
Federal funds rate
Discount rate
LIBOR
#5
Which of the following is NOT a function of a central bank?
Issuing currency
Conducting monetary policy
Regulating commercial banks
Setting fiscal policy
#6
Which of the following is NOT a function of commercial banks?
Issuing currency
Accepting deposits
Providing loans
Facilitating international trade
#7
What is the term for the interest rate at which the central bank lends money to commercial banks?
Prime rate
Federal funds rate
Discount rate
LIBOR
#8
What does the term 'fractional reserve banking' refer to?
A system where banks hold reserves equal to the full value of their deposits
A system where banks only keep a fraction of deposits on hand and lend out the rest
A system where banks can only lend money in fractions of the total deposit amount
A system where banks are required to maintain a fixed fraction of their reserves in gold
#9
Which entity typically issues currency in a modern economy?
Central bank
Government treasury
Commercial banks
International Monetary Fund (IMF)
#10
What is the main function of the Federal Deposit Insurance Corporation (FDIC) in the United States?
To regulate stock markets
To insure bank deposits
To set interest rates
To manage foreign exchange reserves
#11
What does the term 'monetary policy' refer to?
Government policy related to taxes and spending
Policy aimed at controlling the money supply and interest rates
Policy related to international trade agreements
Policy aimed at regulating financial institutions
#12
What does the term 'seigniorage' refer to in the context of money and banking?
The cost of printing currency
The difference between the face value of money and its production cost
The interest earned on government bonds
The fee charged for currency exchange
#13
What is the term for the difference between a bank's assets and liabilities?
Net profit
Reserve ratio
Net worth or equity
Interest spread
#14
What is the name for the process of converting financial assets into a liquid form without losing their value?
Fractional reserve banking
Leverage
Securitization
Liquidity transformation
#15
What is the primary purpose of the Basel Accords?
To regulate international trade
To set standards for bank capital adequacy
To establish a global currency
To facilitate sovereign debt restructuring
#16
Which of the following is NOT a component of the M1 money supply?
Currency
Demand deposits
Savings accounts
Traveler's checks
#17
What is the term for the rate at which the general level of prices for goods and services is rising?
Inflation
Deflation
Recession
Stagnation