SOPHIA ECON102 Unit 3 Challenge 1 Latest 2022 May

ECON102 Macroeconomics

Unit 3 Challenge 1

When store owners quote prices in terms of dollars, money is acting as a __________.

a.)store of value

b.)medium of exchange

c.)commodity

d.)unit of account

Which of the following choices is a reason why gold became a form of currency?

a.)It has little practical value.

b.)It is almost impossible to counterfeit.

c.)It contributes to inflation.

d.)It is the most liquid form of money.

What is the central issue that causes bank runs and panics?

a.)Banks fail to pay interest to their depositors

b.)Banks print more money than they have gold in their vaults

c.)Banks withhold deposits from creditors

d.)Banks do not loan out enough funds to stimulate the economy

Some of the founding fathers were initially against a Central Bank because __________.

a.)different states wanted their own currency

b.)they couldn't agree which branch of government would control a Central Bank

c.)the 'Continental' currency had already been issued

d.)the control of the English bank over the colonies

Which of the following describes a way that central banks strengthened the value of currency?

a.)People deposited paper money instead of gold in banks.

b.)Traders made a living by exchanging currency between cities.

c.)Over time, the banking system becomes less reliant on the gold standard.

d.)Banks lent out more money than is kept in reserves.

Which of the following statements about the Federal Reserve is true?

a.)The members of the Board of Governors of the Federal Reserve are appointed for terms of 14 years.

b.)The Federal Reserve is directly controlled by the government, as its members are all elected politicians.

c.)The Federal Reserve prints more money to prevent runs on banks.

d.)The Federal Reserve Board of Governors are elected by the general public.