Macroeconomics_BBA2003_CMC Instructor: Pham Thi Ha

Lecture 5 Monetary, and banking

1. The Federal Reserve System is

a. the world central bank
b. the U.S. central bank
c. a place stocks and bonds are sold
d. all of the above

2. Which of the following is a function of money?

a. acceptability
b. medium of exchange
c. portability
d. relatively scarce

3. Which function of money encourages people to save money?

a. Medium of Exchange
b. Store of Value
c. Unit of Account
d. Acceptability

4. Trade is made easier because of this function of money that eliminates the
need to barter (trade goods for goods).
a. Store of Value
b. Medium of Exchange
c. Unit of Account
d. Divisibility

5. Money that has value because the Government declared that it is money.
a. Fiat Money/currency
b. Commodity Money
c. Currency
d. Coins

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6. At the grocery store last week, you purchased $94.25 worth of groceries. You
paid for the groceries in cash. You gave the cashier four $20 bills, a $10 bill,
four
$1 bills, and a quarter. What is the primary function of money exhibited here?
a. Medium of Exchange
b. Store of Value
c. Unit of Account
d. Acceptable

7. Which of the following is money in the form of gold or silver coins?

a. fiat money
b. commodity money
c. standard money
d. bitcoin

8. Which of the following is used to describe money that is in your pocket,

your checking account, and your piggy bank?
a. specie money
b. fiat money
c. M1
d. M2

9. For the bank, the amount of money in the account of the accountholder is called:
a. Profit
b. Deposit
c. Interest
d. Loan

10.Which of the following is NOT a function of the commercial banks?

a. Receiving deposits
b. Issuing Loans
c. Rediscounting of Bill
d. Safe custody to Valuables

11.Which is NOT a function of commercial bank?

a. Providing financial and tax planning advice
b. Print money
c. Providing insurance
d. Exchanging foreign currencies

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12.the Function of The Central Bank that control the money supply is

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 a. lender of last resort
b. Advisor to the government
c. controls the issue of currency
d. bankers bank

13.Banks control the money supply by

a. restricting the amount of money in circulation
b. lending
c. borrowing
d. printing more money

14.Who license Commercial Banks ?

a. government
b. Central Banks
c. they don't need license
d. they bring their own

15.What is the purpose of Monetary Policy?

a. contribute to economic growth and stability
b. keep rich people from getting too rich
c. Functions like Fiscal Policy
d. give Congress and the political parties more control of the economy

16.The goals of monetary policy do NOT include the promotion of

a. Moderate long-term interest rates
b. Stable prices
c. Maximum employment
d. High government spending.

17.Fiat money is
a. money is checking accounts.
b. money that has intrinsic value on its own.
c. specially created from the Federal Reserve.
d. money that is only valuable because the government says it is.

18.In institution that accepts deposits and makes loans is defined as

a. A bank
b. Insurance
c. Gambling
d. A loan shark

19. Economic growth measures the

a. Growth of productivity
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b. Increase in nominal income
c. Increase in output
d. None of the above

20. Which of the following explains the term economic growth

a. Increase in per capita production

b. Increase in per capita real income
c. Structural change in the economy
d. All of the above

21. When an economy produces more output per capita the economy is said to be
having
a. Inflation
b. Economic growth
c. Economic planning
d. Living standard

21. The rate of growth of an economy mainly depends upon

a. The rate of growth of the labour force
b) The proportion of national income saved and invested
c) The rate of technological improvements
d) All of the above

22. Productivity of an organization is equal to ?

a. Output / Input
b. Output x Input
c. Input / Output
d. Output - Input

23. Due to Increased Productivity, workers can get?

a. Punishment from employer
b. Sickness
c. Half of the salary
d. Higher salary and reduced working hours

24. Increased productivity benefits to?

a. Employee
b. Employee and industry
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c. Employee industry and nation
d. Nobody

25. Which of the following factors responsible for increase in productivity?

a. Improved raw materials
b. Better technology
c. Good working conditions
d. All the above

26. Which of the following is not considered for assessment of the standard of
living?
a. Per capita income
b. Standard of education
c. Quality health care
d. Number of political party

27. Economic development as measured by the United Nations means...

a. An increase in the value of the output of a country’s goods and services
b. The improvement in a country’s wealth and the living conditions of its people
c. The division of a nation’s jobs into different sectors
d. The quality and price of goods imported into a country
e. The value of a product compared to the needed labor

28. Development means increasing standards and quality of life

a. True
b. False

29. Development is measured of a country’s?

a. Economic Health
b. Social Condition
c. Standards Of Living
d. All The Above