the economics of money, banking, and financial markets

67 #

© 2014 Pearson Canada Inc.#

13. 
    

    Whatever a society uses as money, the distinguishing characteristic is that it must ____.
    A) be completely inflation proof
    B) be generally acceptable as payment for goods and services or in the repayment of debt
    C) contain gold
    D) be produced by the government
    Answer: B
    Diff: 2 Type: MC Page Ref: 46
    Skill: Recall
    Objective List: 3.2 Distinguish among the three primary functions of money

    
    


14. 
    

    All but the most primitive societies use money as a medium of exchange, implying that
    ____.
    A) the use of money is economically efficient
    B) barter exchange is economically efficient
    C) barter exchange cannot work outside the family
    D) inflation is not a concern
    Answer: A
    Diff: 1 Type: MC Page Ref: 48
    Skill: Applied
    Objective List: 3.2 Distinguish among the three primary functions of money

    
    


15. 
    

    Kevin purchasing concert tickets with his debit card is an example of the ____ function
    of money.
    A) medium of exchange
    B) unit of account
    C) store of value
    D) specialization
    Answer: A
    Diff: 1 Type: MC Page Ref: 47
    Skill: Applied
    Objective List: 3.2 Distinguish among the three primary functions of money

    
    


16. 
    

    When money prices are used to facilitate comparisons of value, money is said to function as
    a ____.
    A) unit of account
    B) medium of exchange
    C) store of value
    D) payments-system ruler
    Answer: A
    Diff: 1 Type: MC Page Ref: 48 - 49
    Skill: Applied
    Objective List: 3.2 Distinguish among the three primary functions of money