RE 165 Real Estate Economics
Due 3/15/2012
Quiz for Chapter 4: Money Credit and Real Estate
1. Which of the following is not considered a function of money?
A. medium of exchange
B. measure of value
C. standard of deferred payment
D. standard of tangible asset
2. The greatest percentage of the U. S. money supply is
represented by:
A. checking accounts
B. coins
C. paper currency
D. certificates of deposit
9. Which government agency insures savings accounts at
approved depository institutions?
A. Federal Reserve System
B. Federal Home Loan Bank
C. Federal Deposit Insurance Corporation
D. Federal Trust Association
10. Which of the following is true?
A. U. S. paper currency is not backed by gold.
B. Inflation is always good for real estate because prices go up.
C. Government deficits decrease the government’s need to
borrow.
3. If the banking system is using a 10 percent reserve
D. All economists agree that monetary policy is better than fiscal
requirement, an initial $ 1,000 deposit can expand to a maximum policy for controlling the economy.
of how much in new loans?
A. $ 1,000 B. $ 5,000 C. $ 9,000 D. $ 10,000
11. Money has various functions. When money is used to
describe what a debtor owes a creditor, this function of money is
4. If the Federal Reserve wishes to expand the money supply, it
called a:
could:
A. medium of exchange
A. increase the reserve requirements
B. measure of value
B. raise the discount rate
C. standard of deferred payment
C. buy government bonds
D. store of value
D. increase the federal funds rate funds rate
12. Depository institutions create money as a result of a concept
5. The rate of interest that one bank charges another for the
known as:
overnight use of excess reserves is called:
A. fractional reserve banking
A. prime rate
B. demand deposits
B. discount rate
C. reintermediation
C. federal funds rate
D. capitalization banking
D. commercial rate
13. A decrease in the rate of inflation is called:
6. The flow of funds from depository institutions to the general
A. deflation B. disinflation C. disintermediation D. disintegration
money market is called:
A. reintermediation
14. Rapid unanticipated inflation is most harmful to real estate:
B. disintermediation
A. lenders who grant ARM loans
C. run on the bank
B. lenders who grant fixed rate loans
D. recapitalization
C. borrowers who have fixed rate loans
D. purchasers who pay cash
7. Which of the following actions by The Fed tends to raise
interest rates?
15. For monitoring and analysis, the Federal Reserve classifies
A. selling government securities
coins, paper money, and demand deposits as:
B. lowering the discount rate
A. M1 B. M2 C. M3 D. M4
C. decreasing reserve requirements
D. reducing the federal funds rate
16. “Too much money chasing too few goods” is what kind of
inflation?
8. The increase in the use of foreign capital tends to motivate
A. cost- push B. spiral- up C. twist- down D. demand- pull
Congress and the president to solve the U. S. budget deficit
problem.
17. The Federal Reserve System contains how many regional
A. true B. false
reserve banks?
A. 5 B. 7 C. 12 D. 14
RE 165 Real Estate Economics
Due 3/15/2012
Quiz for Chapter 4: Money Credit and Real Estate
18. The Federal Reserve’s control over the economy is called:
A. fiscal policy
B. monetary policy
C. fractional reserve policy
D. market policy
19. When The Fed buys and sells government notes and bonds, it
is called:
A. change in reserve requirements
B. change in discount requirements
C. supply of money operations
D. open- market operations
20. To decrease prevailing interest rates, The Fed:
A. sells government notes
B. lowers the discount rate
C. increases reserve requirements
D. increases the federal funds rate
21. Recovery in the real estate market frequently begins before a
full recovery in the general economy.
A. true B. false
22. When interest rates rise, the:
A. demand for housing declines
B. supply of housing increases
C. demand for commercial real estate increases
D. supply of commercial real estate increases
23. Historically, in tight- money markets, real estate mortgages
are attractive investments.
A. true B. false
24. A decrease in mortgage interest rates tends to increase:
A. home sales
B. refinances
C. home prices
D. all of the above
25. Which mortgage market reform has insulated depository
institutions from excessive disintermediation?
A. adjustable rate mortgages
B. money market certificate accounts
C. an improved secondary mortgage market D. all of the above