20. Money is anything that: A) serves as a medium of exchange for goods and serv

Question

20. Money is anything that: A) serves as a medium of exchange for goods and services. B) can be converted into silver with relatively little loss in value. C) can be converted into gold with relatively little loss in value. is traded in the stock market. D) Use the following to answer question 21: Figure: Change in the Demand for U.S. Dollars Euros per U.S. dollar Supply of U.S. dollars X2 02 Quantity of U.S. dollars 21. (Figure: Change in the Demand for U.S. Dollars) Refer to the information in the figure Change in the Demand for U.S. Dollars. The change from Di to D2 will occur, all other things being equal, if the: A) supply of euros decreases. B) demand for euros increases. C) demand for euros decreases. D) demand for dollars increases. 22. Bank reserves can be held in the form of A) B) C) D) loans and cash in the bank's vault loans and deposits with the Fed loans and checking accounts deposits with the Fed and cash in the bank's vault 23. Suppose the Federal Reserve were to engage in open-market operations by buying $100 million of U.S. Treasury bills. Which would be the end result of such an action? A) The money supply would stay the same. B) The money supply would decrease by $100 million. C) The money supply would increase by $100 million. D) The money supply would increase by more than $100 million.

Explanation / Answer

20. Money serves as a medium of exchange for goods and services and for transaction purposes. Money is used to fetch the optimum value of its currency by purchasing goods and services.

So, option a)

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