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Question 1

  1. Checkable deposits are money because they
    are

    A.

    token money

    B.

    fiat money

    C.

    a medium of exchange

    D.

    legal tender

4
points  

Question 2

  1. Are credit cards considered to be money?

    A.

    Yes, because their value is included in the
    calculation of M 1.

    B.

    No, because they provide a short-term loan to
    cardholders from a financial institution that issued the card.

    C.

    Yes, because their value is included in the
    calculation of M 2.

    D.

    No, because the card transactions are not
    insured by either the Federal Reserve banks or the U.S.
    Treasury.

4
points  

Question 3

  1. Which best describes the backing of money in
    the United States?

    A.

    the belief of holders of money that it can be
    exchanged for desirable goods and services

    B.

    the gold bullion that is stored in Fort Knox,
    Kentucky

    C.

    the confidence of the public in the ability of
    government to pay off the national debt

    D.

    the willingness of banks and the government to
    surrender something of value in exchange for money