Understanding Monetary Assets and Money Supply Quiz
Test your knowledge of monetary economics with questions on assets, money supply components, policy tools, and more.
#1
Which of the following is considered a monetary asset?
Real estate
Stocks
Cash
Machinery
#2
What is the primary function of money supply?
To regulate interest rates
To control inflation
To facilitate transactions
To regulate fiscal policy
#3
Which of the following is NOT a component of M2 money supply?
Savings accounts
Demand deposits
Cash
Money market funds
#4
What is the formula for calculating money multiplier?
Reserve requirement / Currency in circulation
Currency in circulation / Reserve requirement
1 / Reserve requirement
Reserve requirement / 1
#5
Which of the following is a function of the central bank regarding money supply?
Issuing bonds to the public
Regulating commercial bank reserves
Setting stock market prices
Regulating mortgage rates
#6
What does the term 'liquidity' refer to in the context of monetary assets?
The ability to convert assets into cash quickly without significant loss of value
The total value of assets owned by an individual or institution
The total value of government bonds held by a central bank
The process of acquiring assets through investment
#7
What is the significance of the term 'near money' in the context of monetary assets?
Assets that are highly liquid and easily convertible into cash
Assets that are not easily convertible into cash
Assets that are not included in the money supply
Assets that have a fixed value
#8
In the context of monetary policy, what is the purpose of open market operations?
To regulate government spending
To control inflation
To influence interest rates
To regulate tax policies
#9
What is the primary determinant of the money supply according to the money multiplier model?
Reserve requirements
Interest rates
Government spending
Inflation rates
#10
How does the Federal Reserve conduct contractionary monetary policy?
By decreasing reserve requirements and purchasing government securities
By increasing reserve requirements and selling government securities
By decreasing reserve requirements and selling government securities
By increasing reserve requirements and purchasing government securities
#11
Which of the following is a tool of expansionary monetary policy?
Decreasing the money supply
Increasing reserve requirements
Increasing interest rates
Purchasing government securities
#12
What is the significance of the term 'velocity of money'?
The speed at which the central bank prints money
The speed at which money circulates in the economy
The speed at which interest rates change
The speed at which inflation occurs
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