Money & Banking Exam Questions (51 Terms) With Verified Definitions Updated 2024

Which of the following is a valid criticism of the use of money as a store of value in modern economies? A. annual inflationary loss of buying power B. money supply is too narrowly defined C. storing money is wasteful D. imperfect as a unit of account {Ans: A}In macroeconomics, ___________________________ describes a situation in which two people each want to exchange some good or service that the other can provide. A. a medium of exchange B. a double coincidence of wants C. interrelated banking D. the usefulness of money {Ans: B}Stealth bank has deposits of $600 million. It holds reserves of $30 million and government bonds worth $80 million. If the bank sells its loans at market value of $400 million, what will its total assets equal? A. $110 million B. $710 million C. $480 million D. $510 million {Ans: D}The market in which loans are bought and sold is called the: A. loan market. B. money market. C. secondary loan market. D. primary loan market. {Ans: C}The people in an economy have $10 million in money. There is only one bank that all the people deposit their money in and it holds 5% of