Question

Question 1

True or false?

Unlike the goods and services used in a barter economy, money is a perfect store of value.

Select the correct answer below:

True

False

Question 2

True or false?

Because the chips from a casino hold no value in a grocery store, they do not fit the definition of money.

Select the correct answer below:

True

False

Question 3

In the southern part of colonial America, how did the government prevent inflation of its commodity money?

Select the correct answer below:

Printing more paper money.

Organizing vigilante squads to burn tobacco crops.

Setting limits to the amount of gold introduced into circulation.

Growing more tobacco plants.

Question 4

Which of the following is an example of commodity money? Select all that apply.

Select all that apply:

Beads

A ten-dollar bill

Mackerel

A paper check

Question 5

Which of the following types of bank accounts would be included in M1’s category of "other checkable deposits" (also referred to as "other checking accounts")? Select all that apply.

Select all that apply:

NOW accounts

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ATS accounts

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Savings accounts

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Checking accounts

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Question 6

True or false?

Money market accounts include IRA and Keogh accounts.

Select the correct answer below:

True

False

Answer 1

1.

Ans. True

Money is a medium of exchange, which has storing value. It means money could be stored today to meet the uncertainties (like payments) in future; all goods may not be stored because of the chance of getting damage.

2.

Ans. True

Chips do not constitute value to a store, since this is not the medium of exchange.

3.

Ans. 4^th option

If commodities (like tobacco) are treated as the medium of exchange, then these are commodity money; it happened in the colonial period.

Increasing number of plants decreased the excess demand of tobacco, which restricted inflation.

4.

Ans. 1^st and 3^rd options

These are commodities or goods only; therefore, these are commodity money. Other two are not commodities.