AnswersEconomics - PathwaysInflation and Stagflation

Money Answers

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1
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When might it be important to know a currency’s exchange rate?

A
when planning expenses for an overseas trip
B
when changing money into smaller denominations
C
when preparing to buy something expensive
D
when deciding which college is the best value
2
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What might cause a change in the value of fiat money?

A
a change in the value of commodities
B
a change in government regulations
C
a change in materials used to make money
D
a change in individuals’ spending habits
3

What is true of representative money? Check all that apply.

A
It can be exchanged for a valuable good.
B
It was once the most common form of money.
C
It was used in systems involving a "gold standard."
D
It can be traded for a commodity such as silver.
E
It is made with precious metals or stones.
4

What types of money are included in the M2 category? Check all that apply.

A
currency
B
savings accounts
C
checking accounts
D
commodity money
E
short-term investment accounts
5

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.
6

People might choose to use a debit card rather than cash for purchases because

A
they do not want to carry around large amounts of cash.
B
their banking institutions charge high fees for cash withdrawals.
C
most items cost less when purchased with a debit card.
D
debit cards have a higher value than cash and can buy more.
7

A currency’s exchange rate is

A
how many denominations the currency has.
B
its stable rate as established by the government.
C
how easily it can be divided into other currencies.
D
its changing value relative to other currencies.
8

A currency is a system of money created and used by

A
an individual or a group of people.
B
all people who live in the same era.
C
a nation or region of the world.
D
a town, city, or state within a region.
9

What is one problem that might commonly occur when one is bartering?

A
Someone wants to trade a valuable item for a less valuable one.
B
Two people have different ideas about the value of an item.
C
Someone wants to barter a good in exchange for a service.
D
Two people want to trade items of equal or nearly equal value.
10

To barter means to

A
sell.
B
create.
C
trade.
D
earn.

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