1. Which is not legal tender?

a. a dime

b. a $20 bill

c. a checking account in a commercial bank

d. none of the above, that is, all of the above are legal tender

2. In the 1970s the U.S. price level doubled. Which function of money was accomplished very poorly throughout the 1970s?

a. standard of value

b. unit of account

c. means of payment

d. store of value

3. Suppose a primitive society has only 12 items available for purchase. How many different prices would there be in a barter economy and in a monetary economy?

a. 12 & 132

b. 132 & 12

c. 66 & 12

d. 12 & 12

4. One of the advantages of fiat money over full-bodied or commodity money is

a. it is less likely to be associated with inflation

b. its quantity can be controlled by human decision

c. it is more expensive to produce, limiting its quantity

d. all of the above are advantages of fiat money

5. In constructing today's measures of money, the Federal Reserve puts the most weight on

a. demand deposits

b. currency

c. time deposits

d. none of the above - all items included in a measure of money have the same weight

ANSWER KEY - 1c; 2b; 3c; 4b; 5d