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Florida International University *

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Economics

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Feb 20, 2024

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Score for this quiz: 27 out of 23 Submitted Mar 6 at 6:33pm This attempt took 69 minutes. 0 / 0 pts Question 1 I promise to follow Cal Poly Humboldt's academic honesty policy and not communicate with any other students in the class nor any other individual while taking this quiz. I hereby agree that all of my answers will be completed without the help of another person. True Correct! Correct! False 1 / 1 pts Question 2 How does the total amount of circulating FRNs change? The Federal Reserve (Fed) increases or decreases its demand for them. Households and private businesses increase or decrease their demand for them. Correct! Correct!

Households and the Treasury increase or decrease their demand for them. The Fed printed more of them and passed them around to households and businesses. The Bureau of Engraving and Printing (BEP) decided there should be more or less dollars in the economy. 1 / 1 pts Question 3 Congress and the Treasury department conduct monetary policy. True False Correct! Correct! 1 / 1 pts Question 4 There are zero financial limits for Congress and the Treasury, though there are several political, institutional, economic and real resource limits.

True Correct! Correct! False 1 / 1 pts Question 5 Your Answer: How did Aristotle, Locke and Smith justify their barter origin story of money? They reasoned that money emerged from barter by deductive logic alone. 1 / 1 pts Question 6 Researchers who have chosen a more inductive approach investigating empirically how money and banking actually works, have been more likely to favor the view that money is not fundamentally a "physical thing". True Correct! Correct! False

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1 / 1 pts Question 7 Your Answer: Why does the "loan" sit on the asset-side of a bank's balance sheet? A loan is the IOU of the borrower(sits on the liability side of the borrower), so its sits on the asset side of the bank 1 / 1 pts Question 8 Since the federal government does not need your FRNs or electronic DDs to spend now, what is the main reason it taxes people, banks, non-banking businesses. Create demand for government IOUs. Correct! Correct! Influence human behavior. Create revenue for the federal government. Change distribution of income and wealth. Reduce inflation. 1 / 1 pts Question 9

Corresponding-counting is a non-abstract method of record keeping. True Correct! Correct! False 1 / 1 pts Question 10 Your Answer: Why is primitive non-standard money considered limited purpose money? Money was not uniform and had differences in quality. It is limited in its ability to function as money. It was an imprecise measuring rod. 1 / 1 pts Question 11 According to Martin, why did so many limited-purpose units for measuremen t exist in the Middle Ages? Many different people created them (bottom up) for use in general contexts. Correct! Correct!

Many different people created them (bottom up) for use in specific contexts. Back then people were mad. The sovereign created them (top down) but for use in specific contexts. 1 / 1 pts Question 12 According to Locke, those that believe money is different from the metal it is made of are either confused or trying to trick someone. True Correct! Correct! False 1 / 1 pts Question 13 Commercial banks can lend with or without a willing borrower. True False Correct! Correct!

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1 / 1 pts Question 14 The private sector investment channel of transmission is supposed to influence the banking system by raising or lowering the federal funds rate (ffr) and make it more or less expensive for firms to borrow for capital investment. True False Correct! Correct! 2 / 2 pts Question 15 Your Answer: In an interview in 2010, Chairman Bernanke stated about purchasing $600 billion in Treasury securities: "One myth that's out there is that what we are doing is printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way." (a) What is changing? (b) How does the amount of currency (FRNs) in circulation actually change? a) The electronic reserve deposits are changing b)Houses and business asking for more cash is what changes the amount of FRNs in circulation.

1 / 1 pts Question 16 When economists say money is like a veil lying over the real economy, what do they mean? Money is superficial like a veil. Money is important, people use it as a store of value, but it has zero impact on the real economy (money is neutral). Money is unimportant, people only use it as a medium to gain goods and services, but it still has a large impact on the real economy (not neutral). Money is unimportant, people only use it as a medium to gain goods and services, it has zero impact on the real economy (money is neutral). Correct! Correct! 1 / 1 pts Question 17 A person who wears a Rolex watch (a sign's vehicle) is only ever trying to communicate to others information about metal, gears, and time. True

False Correct! Correct! 1 / 1 pts Question 18 US lawmakers created the Federal Reserve in 1913 to stabilize rare banking panics. True False Correct! Correct! 1 / 1 pts Question 19 The Federal Reserve Act created 12 Reserve banks along with the Board because? They wanted the institution to have extra layers of organization. Anti -federalists views, wanted to de centralize policy-making. Correct! Correct! Anti -federalists views, wanted to centralize policy-making. Federalists views, wanted to de centralize policy-making.

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1 / 1 pts Question 20 Your Answer: How is it possible that a sovereign government that issues fiat money can default on its debt? It pegs the currency to a currency that doesn't have monopoly control over or peg it to a precious metal 1 / 1 pts Question 21 Your Answer: The conventional (orthodox) barter story of money argues that money appeared after the existence of fully developed barter-markets. It also argues that everyone has complete and perfect information. Why are these two arguments logically incompatible with one another? It is inconsistent because we can't have perfect information and still feel the need for money in a fully developed barter-market. If they had perfect information they wouldn't need money. The barter was not efficient because of the problem of "double coincidence wants" and that did not have a standard unit of account. 1 / 1 pts Question 22

The rai stones of the Yapese and tally sticks of the British Exchequer were? A monetary accounting system where the physical stones and the physical sticks were used as a store of value. A monetary accounting system where the physical stones and the physical sticks were backed to gold and silver. A medium of exchange where people would use the stones or sticks to buy the goods they needed. A monetary accounting system where the physical stones and the physical sticks were simply used as a medium to keep track of credits (assets) or debts. Correct! Correct! 0 / 1 pts Question 23 Despite the fact that trade existed very early on in human history, why didn't fully developed barter-markets form? The problem of the double-coincidence of wants. ou Answered ou Answered orrect Answer orrect Answer

The vast majority of people did not survive by trade but lived off the land, thus there was no need to create extensive markets. The vast majority of people did not survive by trade but through a process of buying low and selling high. A small minority of people did not survive by trade but lived off the land, thus there was no need to create extensive markets. 1 / 0 pts Question 24 Your Answer: Extra Credit (1pt) What is the significance of the Looking Back section on p.185 in Burton and Brown besides creating a dual-banking system? It makes the money creation process invisible 1 / 0 pts Question 25 Your Answer: Extra Credit (1pt) The center of Locke's philosophical system was?

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He was against absolute monarchy. His political philosophy relies on individual natural property rights (especially, individual natural property) and money was part of it, could not be at mercy of the king. He also wanted to organize society in a different way. 1 / 0 pts Question 26 Your Answer: Extra Credit (1pt) In ancient Greece, bulls meat is believed to have represented the universal substance. Why would historians come to such a conclusion? Because the central authority at the time determined the value of that unit and the distribution of the meat. and distributed it in equal portions to each male member 2 / 0 pts Question 27 Extra Credit (2pts, 0.67 each) According to previous Fed Chair Ben Bernanke (see video clip in Modules "The Fed Speaks"): (a) How does the Fed "lend" to banks?

Maria Hernandez Coosemans's Quiz History: Quiz 7 Your Answer: (b) Does the Fed ever use the "tax" money of Americans? (c) What conclusion can we draw about the Feds ability to create high-powered money? a. They make reserve deposits electronically to banks, and they mark up the accounts. b. They don't use tax money from Americans. In the video he said that they only marked up the accounts of the banks c. They can create as much money as they want. They have no limit. Quiz Score: 27 out of 23

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