When a consumer wants to compare the price of one product with another, money is primarily functioning as a:
Unit of account
When a banker records how many dollars each of his borrowers owes the bank, money is serving as a:
Unit of account
If product prices were stated in terms of tobacco leaves, then tobacco leaves would be functioning primarily as:
A unit of account
One major advantage of money serving as a medium of exchange is that it allows society to:
Escape the complications of barter
Money eliminates the need for a coincidence of wants in trading primarily through its role as a:
Medium of exchange
Which definition(s) of the money supply include(s) only items which are directly and immediately usable as a medium of exchange?
People can generally get the following items at their commercial banks, except:
Money market mutual funds
Which of the following "backs" the value of money in the United States?
The acceptability of it as a medium of exchange
United States currency has value primarily because it:
Is relatively scarce, is legal tender, and is generally acceptable in exchange for goods and services
The Federal backing for money in the United States comes from:
Controlling the money supply in order to keep the value of money relatively stable over time
What "backs" the money supply of the U.S.?
The U.S. government's ability to keep the value of money relatively stable
When there is inflation in the economy, it implies that the:
Price index is rising and the purchasing power of money is falling
To keep high inflation from eroding the value of money, monetary authorities in the United States:
Control the supply of money in the economy
The Federal Reserve System consists of which of the following?
Board of Governors and the 12 Federal Reserve Banks
How long is the term of office for members appointed to serve on the Board of Governors of the Federal Reserve System?
Members of the Federal Reserve Board of Governors are:
Appointed by the President to staggered 14-year terms
Which group assists the Board of Governors of the Federal Reserve System in determining monetary policy?
Federal Open Market Committee
The Federal Open Market Committee (FOMC):
Sets policy on the sale and purchase of government bonds by the Fed
The Federal Open Market Committee (FOMC) of the Federal Reserve System is primarily for:
Setting the Fed's monetary policy and directing the purchase and sale of government securities
The twelve Federal Reserve Banks can best be characterized as:
Central banks, banker's banks, and quasi-public banks
Holding the money deposits of businesses and households and making loans to the public are the basic functions of:
Commercial banks and thrift institutions
Which of the following is the most important function of the Federal Reserve System?
Controlling the money supply