Please read, carefully, each question and/or task. Follow directions, include ne

Question

Please read, carefully, each question and/or task. Follow directions, include neat answers and hand in by Thursday, April 21, 2016. This packet is worth 100 points 1. Anything that is accepted to be used for the trading of goods and services is called a a. unit of account b. portable form of money c. medium of exchange d. divisibility factor Match the term with the correct definition objects hat have omething el ether exampleanIOUorcheck Commodity objects that have value because they can be exchanged for something else; for example an IOU or check 3. Fiat 4. Representative Cobjects that have value which can also be B. the gold standard used as a medium of exchange; for example cattle, wheat objects that have value because they are in a safe deposit box D. object that has value because the government says it does; for example a US Treasury issued $20.00 bill 5. In what year was the Federal Reserve created? b. 1865 c. 1913 d. 1929 e. 2001 6. The size of the money supply a. b. c. d. has no effect on the economy is totally regulated by the government affects domestic trade but does not affect international trade influences most interest rates 7. The percentage of money deposited in checking and savings accounts that must be held by banks in either their own vaults or at the District Federal Reserve Bank is called the a. discount rate b. reserve requirement c. security rate d. margin requirement

Explanation / Answer

1. Thing which is accepted for exchange of goods and services for trading is called medium of exchange property of money. So the answer will be medium of exchange.

6. Money supply is created by the government. Government regulates the money supply by using fiscal policies. So the answer will be b.

7. Money that commercial banks kept by the banks in their own account or with the district federal bank is called marginal reserve or requirment . So the answer is d.

8. Institute which covers the depositers account to be insured is the FDIC i.e., federal deposit insurance corporation. So answer is d.

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