This website uses cookies to ensure you have the best experience. Learn more

Money&Banking Essay

3131 words - 13 pages

Problem Sheet | The Economics of Money, Banking & Financial Markets |
2014 | Ch 3 Sheet 3 |
Instructor: Hala A. Fares | Tutor: Sarah Mostafa |

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) To an economist, ________ is anything that is generally accepted in payment for goods and services or in the repayment of debt. 1) _______

A) credit B) money C) wealth D) income

2) Money is 2) _______
A) a flow of earnings per unit of time.
B) anything that is generally accepted in payment for goods and services or in the repayment of debt.
C) always based on a precious metal like gold or silver.
D) the total collection of pieces of ...view middle of the document...

B) money is a flow and income is a stock.
C) there is no differencemoney and income are both stocks.
D) there is no differencemoney and income are both flows.

11) Which of the following is a true statement? 11) ______
A) Income is a flow variable. B) Money and income are stock variables.
C) Money is a flow variable. D) Money and income are flow variables.

12) Which of the following statements uses the economists' definition of money? 12) ______
A) Betsy is richshe has a lot of money.
B) I hope that I have enough money to buy my lunch today.
C) The job with New Company gave me the opportunity to earn more money.
D) I plan to earn a lot of money over the summer.

13) Of money's three functions, the one that distinguishes money from other assets is its function as a 13) ______
A) store of value. B) medium of exchange.
C) standard of deferred payment. D) unit of account.

14) If peanuts serve as a medium of exchange, a unit of account, and a store of value, then peanuts are 14) ______
A) money. B) bank deposits. C) reserves. D) loanable funds.

15) ________ are the time and resources spent trying to exchange goods and services. 15) ______
A) Bargaining costs. B) Contracting costs.
C) Transaction costs. D) Barter costs.

16) Compared to an economy that uses a medium of exchange, in a barter economy 16) ______
A) transaction costs are higher. B) liquidity costs are higher.
C) liquidity costs are lower. D) transaction costs are lower.

17) When compared to exchange systems that rely on money, disadvantages of the barter system include: 17) ______

A) lowering the cost of exchanging goods over time.
B) the requirement of a double coincidence of wants.
C) encouraging specialization and the division of labor.
D) lowering the cost of exchange to those who would specialize.

18) The conversion of a barter economy to one that uses money 18) ______
A) increases efficiency by reducing the need to exchange goods and services.
B) does not increase economic efficiency.
C) increases efficiency by reducing transactions costs.
D) increases efficiency by reducing the need to specialize.

19) Which of the following statements best explains how the use of money in an economy increases economic efficiency? 19) ______

A) Money cannot have an effect on economic efficiency.
B) Money increases economic efficiency because it discourages specialization.
C) Money increases economic efficiency because it decreases transactions costs.
D) Money increases economic efficiency because it is costless to produce.

20) When economists say that money promotes ________, they mean that money encourages specialization and the division of labor. 20) ______

A) greed B) bargaining C) efficiency D) contracting

21) Money ________ transaction costs, allowing people to specialize in what they do best. 21) ______
A) eliminates B) increases C) enhances D) reduces

22) For a commodity to function effectively as money it must be 22) ______
A) deteriorate quickly so that its supply does not...

Other Papers Like Money&Banking

Money and Banking Essay

1534 words - 7 pages 1. Under what circumstances, if any, is signing a merger or acquisition agreement with a go-shop clause an effective substitute for a pre-signing market check by the seller? 2. Under Revlon duties, directors are expected to take steps to obtain the best transaction reasonably available for the stakeholders. The Delaware Supreme Court has stated, “there is no single blueprint that a board must follow to fulfill its [Revlon] duties

Money and Banking Essay

1144 words - 5 pages Free Money for Strangers South University Government assistance programs are supported by tax dollars. This is controversial for hardworking Americans. It seems as though those less fortunate get a pass and receive an income without working for it, while those working, continue to struggle to make what little they do have, stretch. That’s not total freedom in the land of opportunity. So the question that remains is what responsibility is

Customer Perception Towards Internet Banking

613 words - 3 pages Customer Perception towards Internet Banking –with special reference to State Bank of Mysore, Shivamogga District Introduction Information technology plays a major role in shaping industries all over the world obviously banks reply heavily on IT in conducting their business and spend huge amounts of money on such technology to reduce operation costs and gain the competitive advantage over their rivals by offering customer s better

A Letter to My Parents

571 words - 3 pages those in continental Europe. The nature of their banking was mostly concentrated on granting of loans to the crown, collection and transmission of papal revenues, and financing of trade. Bills of exchange were popularly used but they were not used as money. Bank notes were not known. Interest rates were controlled by the state. Goldsmiths Started Banking 1640, goldsmiths were engaged in money-lending using their own funds. They therefore

M Commerce

1453 words - 6 pages FreePaisa for the world q Home q About FreePaisa for the world Electronic Financial blog post Posts Comments NBAD to dial ‘R’ for remittance National Bank of Abu Dhabi (NBAD) has signed an agreement with MoneyGram International to allow customers to send money home using mobile phones. Recent Posts q NBAD to dial ‘R’ for remittance Worldwide Mobile Payment Users to Reach 108.6 Million in 2010 Mobile banking will


3905 words - 16 pages banking system can add value and value chain can be created in the e-business process. In turn it helps to raise gross domestic product (GDP) of the economy as a whole. EBanking facilitates instant access to account information, maintain control over the finances, saving time, avoiding trips and phone calls to the bank. It enables account access that isn’t limited to a specific PC and usages of money management software like Quicken and Microsoft

About Mobile Banking

910 words - 4 pages started using their mobile phones in performing transactions to avail of the different financial services offered by financial intermediaries and have experienced its convenience. However, many people remain skeptical of the benefits of mobile banking services and whether it is a much safer way to perform financial transactions. In the Philippines, mobile banking started in the year 2000 when Smart Communications launched Smart Money which is

Describe Three Financial Innovations Which Have Been Introduced By Banks In Kenya In The Recent Past As A Way To Increase Effeciencyand Reduce Cost

431 words - 2 pages great success, where shopkeepers operate bank accounts for millions of customers. Mobile Phone Banking Mobile Phone Banking is integrated into the M-Pesa menu or is accessible through Equity Bank’s own mobile banking service. Customers can deposit and withdraw money from their M-Banking account by transferring value to/from their M-Pesa account, which they can cash in or cash out from at any M-Pesa outlet, or through a link to a Bank’s account

The Reason of Using E-Banking

731 words - 3 pages , because nowadays, world technologies are improving rapidly. The workloads of Hong Kong citizens are big, they might not have enough time to visit bank branches for their finical activities. Therefore, a majority of Hong Kong citizen, who are familiar with the Internet, will choose to use E-banking as the services of this system is time-saving, convenient and 24-hours access because time are important to those wage earner, since time is money. The E

Bank of America

1600 words - 7 pages of New York Mellon, Jp Morgan Chase & Co., Wells Fargo & Co., Citigroup, and PNC Financial Service. All of these major banks also have mobile banking and majority of their functions are the same. If BoA, were to create a more complex/ detailed mobile banking program then, yes, it would cost the company more money, however it would set their product apart from its competitors. Another pro to this alternative is that over time the more in

Universal Banking

1505 words - 7 pages investments. However in practice the term 'universal banking' refers to those banks that offer a wide range of financial services, beyond the commercial banking functions like Mutual Funds, Merchant Banking, Factoring, Credit Cards, Retail loans, Housing Finance, Auto loans, Investment banking, Insurance etc. This is most common in European countries. For example, in Germany commercial banks accept time deposits, lend money, underwrite corporate

Related Essays

Money & Banking Essay

2669 words - 11 pages Kelcie Jeffries Money & Banking Mr. Foster March 8, 2014 How Technology has changed the Banking World over Time The ATM “In 1939, Luther Simjian patented an early and not-so-successful prototype of an ATM. However, some experts have the opinion that James Goodfellow of Scotland holds the earliest patent date of 1966 for a modern ATM, and John D White in the US is often credited with inventing the first free-standing ATM design. In 1967

Money & Banking Essay

2301 words - 10 pages The Federal Reserve Jermaine C. Taylor ECO320 Money & Banking March 2, 2014 Prof. Diana Bonina, Ph.D. Strayer University The Federal Reserve established on December 23, 1913 when President Woodrow Wilson signed the Federal Reserve Act into law. Although started in 1913, actual operations of the Reserve began in 1914. In order to provide the country with a safer financial system, Congress created The Federal Reserve System as the

Money And Banking Practice Exam Essay

2584 words - 11 pages 1 of 9 Economics 310 Money and Banking Practice Midterm Exam Winter 2008 The actual midterm will involve only 25 multiple choice questions, to be completed in 80 minutes. No calculators, no cell phones, no personal digital media players or any other electronic equipment should be visible or in use during the exam. Each question will score 4 points if correct, 1 point if unanswered and 0 points if incorrect. This means that your final exam

Money Banking Essay

631 words - 3 pages Bonds A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The Federal government, states, cities, corporations, and many other types of institutions sell bonds. Generally, a bond is a promise to repay the principal along with interest on a specified date (maturity). Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, becomes a