Name _____________________________________ Economics
Chapter 10: Money and the Financial Market
(51 pts.) Date ___________________________ Blk. ______
Answer the following questions using your textbook and lecture notes. (Type all answers.) (42 pts.)
1.
Define money. (1 pt.)
2.
State the term that refers to the fact that a merchant must accept it in the payment of debts whatever the government declares to be money. (1 pt.)
3.
List the three functions of money. (3 pts.)
4.
Explain in your own words, a double coincidence of wants. (2 pts.)
5.
Explain the concept of bartering. (2 pts.)
6.
List the five characteristics of an effective monetary system possess. (5 pts.)
7.
State which characteristic of money you would consider most important and explain why. (2 pts.)
8.
List and define the three kinds of money that can circulate in an economy. (6 pts.)
9.
Name the two measures of the money supply discussed in this chapter and list what each includes. (4 pts.)
10.
Explain what it means to say that the United States has a dual banking system? (1 pt.)
11.
Define charter. (1 pt.)
12.
List the four authorities who regulate commercial banking. (4 pts.)
13.
List the functions of commercial banks.(3 pts.)
14.
Explain the difference between a financial market and a commercial bank. (2 pts.)
15.
Give an example of a contractual saving institution. (1 pt.)
16.
For what economic position was Milton Friedman a leading spokesman, and what did that position see as the principal cause for inflation? (2 pts.)
17.
In your opinion, what would be some disadvantages to having a money system backed by some precious commodity, such as gold or silver? (2 pts.)
Matching: Place the letter of the function of money which best corresponds to the word or phrase. (9 pts.)
A.
means of payment
B.
means of storing purchasing power
C.
measure of value
1.
“Joe, here is your paycheck.
2.
“I think we ought to buy a car without a tax refund.”
3.
John paid cash for his car
4.
“That can of hair spray is $10.”
5.
“Sold to the man in the front row.”
6.
“$80 for that old thing? No way!”
7.
“If you put it on deposit for six months, you will earn 8.5% interest.”
8.
“I think we ought to save our tax refund.”
18.
“I just feel a little better having a ten-dollar bill in my wallet ‘just in case.’”