5-2 (17-20) Question 17. 17. If an economy uses silver as money, then that econo

Question

5-2 (17-20)

Question 17. 17. If an economy uses silver as money, then that economy’s money (Points : 5) serves as a store of value but not as a medium of exchange. serves as a medium of exchange but not as a unit of account. is commodity money. has no intrinsic value.

Question 18. 18. Reserves increase if the Federal Reserve (Points : 5) raises the discount rate or auctions more credit. raises the discount rate but not if it auctions more credit. lowers the discount rate or auctions more credit. lowers the discount rate but not if it auctions more credit.

Question 19. 19. The Fed increases reserves if it conducts open market (Points : 5) purchases or auctions term credit. purchases but not if it auctions term credit sales or auctions term credit sales but not if it auctions term credit

Question 20. 20. Prisoners sometimes determine a single good to be used as money. This good becomes (Points : 5) a medium of exchange and a unit of account. a medium of exchange, but not a unit of account. a unit of account, but not a medium of exchange. neitehr a unit of account nor a medium of exchange.

Explanation / Answer

17 is commodity money

18 raises the discount rate but not if it auctions more credit

19 purchases or auctions term credit

20 a medium of exchange and a unit of account.

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