Question

Test 5 #21-26

(21)

Which of the following is a characteristic of money?

	Indivisible
	Perishable
	Portable
	All of the above

  

  

  

(22)

Over the past few decades, it has become easier to convert assets to cash. For this reason, the ____________________ for holding money has grown less important.

	transaction motive
	speculative motive
	accumulation motive
	precautionary motive

  

  

  

(23)

If the money supply increases, then interest rates will rise.

	true
	false

  

  

  

(24)

Which of the following actions would most effectively reduce the demand for money?

	Taking money out of circulation
	Cutting taxes
	Sending “tax rebate” checks to all American households
	Mandating price increases on key consumer goods

  

  

  

(25)

Which one of the following is an example of a financial intermediary?

	A T-bill
	A brokerage
	A bank
	An income-earning consumer

  

  

  

(26)

If a pension fund owns stock in a corporation, the stock would be listed as an asset on its balance sheet.

	true
	false

Answer 1

21.
The answer is option 3 portable
The characterstic of money that is correct is that it is portable, it can be carried anywhere.
22.
The answer is option 4 precautionary motive
Precautionary motive of money is the use of money for emergency purpose.
23.
The statement is TRUE
The money supply and the interest rates are inversely related.
24.
The answer is option 2 cutting taxes
Cutting Taxes will mostly reduce the demand for money.
With a cut in tax there will be more disposable income in hand of consumer to which they will demand less money from market