Multiple choice

Question 1  

Precautionary cash balances: 

A. are invested in insurance policies by people who are highly risk-averse. 

B. were emphasized by classical writers on monetary theory. 

C. are intended primarily for unexpected expenditures. 

D. grow when individuals acquire personal lines of credit. 

Question 2  

Money is NOT: 

A. a medium of exchange. 

B. a standard of value. 

C. a store of value. 

D. the exclusive means of holding wealth. 

Question 3  

The first bankers were: 

A. goldsmiths. 

B. printers. 

C. storekeepers. 

D. innkeepers. 

Question 4  

One of the main results of the Depository Institutions Deregulation and Monetary Control Act of 1980 may be to: 

A. lessen the number of financial institutions in the United States. 

B. increase the number of financial institutions in the United States. 

C. discourage the formation of big, nationwide, all-purpose financial institutions. 

D. make it easier for the member banks to borrow money from the Federal Reserve District Banks.