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A13. Credit cards are considered to be "money substitutes" instead of money because (A) (B) (C) (D) (E) they cannot serve as a temporary medium of exchange. credit card accounts are not chequable. money must eventually be used to pay for the transaction. the only function of money they can perform is to serve as a store of value. they are not acceptable to pay for purchases.

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8 Dec 2018
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Related questions

Municipal bonds, or munis,

Select one:

a. are usually a safe investment.

b. pay higher interest rates than most bonds.

c. are often risky investments.

d. are not usually tax-exempt.

Question 17

Question text

The Efficient Market Hypothesis argues that

Select one:

a. stocks are generally overpriced.

b. every investment has some risk.

c. stocks are usually priced about right.

d. all investments are the same.

Question 18

Question text

The par value of a bond is

Select one:

a. a rating of the quality of a bond.

b. the total amount borrowed.

c. the stated interest on the debt.

d. its purchase price.

Question 19

Question text

Which of the following is true regarding the trade offs associated with money?

Select one:

a. If we invest money, those same funds will not immediately be available for spending.

b. Because of scarcity, all of these are correct.

c. Because of scarcity, if we spend a certain amount of money, that same money will not be available to invest.

d. Investors have made the decision to put off spending now in hopes that they money they invested will create more money.

Question 20

Question text

Which of the following statements is true?

Select one:

a. All of these are correct.

b. There are trade-offs invovled in using credit cards.

c. By using a credit card, you may be able to immediately get a good or service that you cannot pay for with cash, but, because of the interest, you will end up paying more than the "price tag" amount.

d. Credit cards often have a "spending limit".

The Credit Card issuer has a culture that focuses on growth by targeting financially strapped people.
Assume that you are a member of congress, what would you do?

Create legislation that does not allow credit-card issuers to raise interest rates for those who cannot pay their bills.

Create legislation that makes it a crime for people like Cate Columbo to entice people to spend money on a credit card when they can't afford it.

I would not create any legislation. Credit-card issuers and people like Cate Columbo are not to blame for our financial problems. People must be responsible for their own behavior.

Invent other options.

Question 1. Which of the following is not included in M1?
a- currency
b- demand deposits
c- traveller's checks
d- credit cards

Question 2. When the Fed purchases $200 worth of government bonds from the public, the U.S. money supply eventually increases by
a- more than $200.
b- exactly $200.
c- less than $200.
d- None of the above are correct.
Question 3. Savings deposits are included in
a- M1 but not M2.
b- M2 but not M1.
c- M1 and M2.
d- neither M1 nor M2.
Question 4. Credit cards
a- defer payments.
b- are a store of value.
c- have led to wider use of currency.
d- are part of the money supply.
Question 5. Table 16-3.
The First Bank of Fairfield

Assets

Liabilities

Reserves $2,000

Deposits $10,000

Loans 8,000

  
Refer to Table 16-3. The reserve ratio for this bank is
a- 0 per cent.
b- 20 percent.
c- 80 per cent.
d- 100 per cent.
Question 6. If an economy uses silver as money, then that economy's money
a- serves as a store of value but not as a medium of exchange.
b- serves as a medium of exchange but not as a unit of account.
c- is commodity money.
d- has no intrinsic value.
Question 7. In the United States, currency holdings per person average about
a- $125; one explanation for this relatively small average is that many people use credit and debit cards to make transactions.
b- $125; one explanation for this relatively small average is that U.S. citizens hold a lot of foreign currency.
c- $3,700; one explanation for this relatively large amount is that criminals probably prefer currency as a medium of exchange.
d- $3,700; one explanation for this relatively large average is that U.S. citizens hold a lot of foreign currency.
Question. 8. Money is the most liquid asset available because
a- it is a store of value.
b- it is a medium of exchange.
c- it is a unit of account.
d- it has intrinsic value.
Question  9. All Fed purchases and sales of
a- corporate stocks and bonds are conducted at the New York Fed's trading desk.
b- government bonds are conducted at the New York Fed's trading desk.
c- real estate and other real assets are conducted by the Federal Open Market Committee.
d- All of the above are correct.
Question 10. The Fed's policy decisions have an important influence on
a- inflation in the long run and employment and production in the short run.
b- inflation in the long run and employment and production in the long run.
c- inflation in the short run and employment and production in the short run.
d- inflation in the short run and employment and production in the long run.

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