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Money — Quiz Answers

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1
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Why must old currency be taken out of circulation when new currency is made?

A
The old currency is more valuable than the new currency.
B
Too much currency in an economic system will create artificial wealth.
C
Too much currency in an economic system will cause inflation.
D
The new currency is much more liquid than the old currency.
2
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What would happen if currency in all countries had fewer denominations, i.e. fewer varieties of coins or numbers of bills?

A
Exchanging money between countries would be much easier.
B
People could not charge as many different prices for goods.
C
All goods would be more expensive than they currently are.
D
People would be more likely to confuse the value of currencies.
3

A currency’s exchange rate is

A
how easily it can be divided into other currencies.
B
its stable rate as established by the government.
C
how many denominations the currency has.
D
its changing value relative to other currencies.
4

How is using money related to bartering?

A
It is a substitute for bartering.
B
It is the opposite of bartering.
C
It is an old form of bartering.
D
It is a newer form of bartering.
5

What gives commodity money its value?

A
the ability to trade it for a valuable good
B
a government’s guarantee of its value
C
its rate of exchange in other countries
D
the type of material with which it is made
6

How is using money related to bartering?

A
It is a substitute for bartering.
B
It is the opposite of bartering.
C
It is an old form of bartering.
D
It is a newer form of bartering.
7

What would happen if currency in all countries had fewer denominations, i.e. fewer varieties of coins or numbers of bills?

A
People would be more likely to confuse the value of currencies.
B
Exchanging money between countries would be much easier.
C
People could not charge as many different prices for goods.
D
All goods would be more expensive than they currently are.
8

A currency’s exchange rate is

A
how many denominations the currency has.
B
its changing value relative to other currencies.
C
its stable rate as established by the government.
D
how easily it can be divided into other currencies.
9

What gives commodity money its value?

A
its rate of exchange in other countries
B
the ability to trade it for a valuable good
C
a government’s guarantee of its value
D
the type of material with which it is made
10

What might cause a change in the value of fiat money?

A
a change in government regulations
B
a change in individuals’ spending habits
C
a change in the value of commodities
D
a change in materials used to make money

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