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

In modern economies, credit cards are a _________________ because of their wide acceptance as a method of payment for both goods and services. A. unit of exchange B. store of value C. unit of account D. medium of exchange {Ans: D}Which category of the money supply would you be contributing to if you invest in money market funds? A. M2 B. M1 C. time deposits D. savings deposits {Ans: A}If Evelyn uses her debit card to buy an iPod, then the money to pay the retailer will come from: A. the debit card company's M1 funds. B. the debit card company's M2 funds. C. her M2 funds. D. her M1 funds. {Ans: D}In macroeconomics, _____________________________ describes a situation where a bank's liabilities can be withdrawn in the short-term while its assets are being repaid in the long-term. A. diversification B. reserve ratio C. an asset-liability time mismatch D. a negative net worth {Ans: C}Which of the following is omitted in a barter transaction? A. trade B. medium of exchange C. store of value D. money {Ans: D}Antonio tries to limit his risk of overexposure to debt by using a ________________ to store a certain amount