A financial intermediary that resells shares of a stock portfolio is a A. mutual fund. B. pension fund. C. loan -backed security. D. bond broker. E. depository institution.

When money acts as a means of holding purchasing power over time, it is serving which function? A. medium of exchange B. source of liquidity C. store of value D. unit of account E. source of wealth

Which of the following assets is most liquid? A. stock B. bond C. loan D. mutual fund E. cash

Fiat money derives its value from which of the following? A. its official status B. the good being used as a medium of exchange C. a promise it can be converted into something valuable D. gold or silver E. exchange rates

Which of the following is a desirable characteristic of money? A. fixed supply B. large denominations C. made of precious metal D. widely accepted E. backed by commodities

The Federal Reserve is charged with doing all of the following EXCEPT A. providing financial services to commercial banks. B. supervising and regulating banks. C. maintaining the stability of the financial system. D. conducting monetary policy. E. insuring bank deposits.

The M1 money supply includes which of the following? A. near-moneys B. checkable deposits C. savings accounts D. time deposits E. mutual funds

When banking regulations were changed so that bank s could pay interest on checking accounts, what was the effect on interest rates and the equilibrium quantity of money?

$$\begin{array} { l l } { \text { Interest rate } } & { \text { Quantity of money } } \\ { \text { a. increase } } & { \text { decrease } } \\ { \text { b. decrease } } & { \text { increase } } \\ { \text { c.increase } } & { \text { increase } } \\ { \text { d. decrease } } & { \text { decrease } } \\ { \text { e. increase } } & { \text { no change } } \end{array}$$

In the following exercises, two sequences are given, one of which initially has smaller values, but eventually “overtakes” the other sequence. Find the sequence with the larger growth rate and the value of n at which it overtakes the other sequence.

$$a _ { n } = n !$$

and

$$b _ { n } = n ^ { 0.7 n } , n \geq 2$$

Which of the following is an example of using money as a unit of account? A. buying a new T-shirt B. purchasing $10 worth of candy C. keeping the dollar you receive each year for your birthday for 10 years D. putting money into your savings account E. paying for lunch with your debit card

The money supply curve is A. upward sloping. B. vertical. C. horizontal. D. downward sloping. E. U-shaped.

One difference between stocks and bonds is that

A) stocks are financial securities, while bonds are labor market securities.

B) stocks are usually issued in electronic form, while bonds are usually issued in paper form.

C) stocks represent ownership in companies, while bonds represent ownership in banks.

D) stocks do not involve a promise to repay a purchaser of the stock, while bonds represent a promise to repay the purchase price of the bond.

The length of a rectangle is 1 inch more than twice its width. The value of the area of the rectangle (in square inches) is 5 more than the value of the perimeter of the rectangle (in inches). Find the width.

Draw a correctly labeled graph showing equilibrium in the money market. Label the equilibrium interest rate

$$r_E$$

and label an interest rate below the equilibrium interest rate

$$r_L.$$

Explain what occurs in the market when the interest rate is

$$r_L$$

and how the market will eventually return to equilibrium.