FINAL EXAM The Money Mystery Challenge 1

Question 1

Inflation is...

Accepted Answer

increase in money supply

Question 2

Economics is the study of the production and distribution of wealth.

Accepted Answer

True

Question 3

When someone loans money to the US Government they receive an IOU called...

Accepted Answer

treasury bond

Question 4

Change is a revolutionary process and you cannot plan ahead.

Accepted Answer

government-controlled economy

Question 5

The third stage of inflation is...

Accepted Answer

quick spending/real value money

Question 6

The second stage of inflation is...

Accepted Answer

quick spending/rising prices

Question 7

Fed officials have quite a bit of control over money supply but almost none over the demand for money.

Accepted Answer

True

Question 8

Money which is in lower demand will circulate slower and affect prices the same way as an increase in the money supply.

Accepted Answer

False

Question 9

Rising velocity and falling demand for money were the driving forces of the 1980s financial panic.

Accepted Answer

True

Question 10

The correction period following an inflation.

Accepted Answer

economic depression

Question 11

Changes in the demand for money can be so weak they make no discernible changes in the money supply.

Accepted Answer

False

Question 12

What is a measure for the demand of money to an economist?

Accepted Answer

velocity

Question 13

Inflation is an increase in prices.

Accepted Answer

False

Question 14

Price increases rise at 10 to 99% per year due to inflation.

Accepted Answer

double-digit inflation

Question 15

The Federal Reserve System (Fed) is the...

Accepted Answer

A, B and C

Question 16

What is meant by the demand for money?

Accepted Answer

desire to hold and not trade money

Question 17

Illiquid investments are easily sold or traded.

Accepted Answer

False

Question 18

In the 1980s, the money supply became more important than the demand for money.

Accepted Answer

False

Question 19

An increase in the amount of money causes...

Accepted Answer

both red and blue

Question 20

Inflation goes through...

Accepted Answer

3 stages

Question 21

Change is an evolutionary process and you can plan ahead.

Accepted Answer

free economy

Question 22

Low demand for money means money is...

Accepted Answer

traded away quickly

Question 23

Changes on Wall Street and Main Street is called

Accepted Answer

injection effect

Question 24

Federal deficit is...

Accepted Answer

when the government's spending exceeds its income.

Question 25

What is money supply?

Accepted Answer

the amount of money in a country or economy

Question 26

High demand for money is money that is...

Accepted Answer

traded away reluctantly

Question 27

The first stage of inflation is...

Accepted Answer

slow rising prices/quick money supply

Question 28

The effects of injections are _________ because people become too dependent on newly printed money.

Accepted Answer

cumulative

Question 29

What is the business cycle?

Accepted Answer

boom and bust cycle

Question 30

Money created by a legal tender law.

Accepted Answer

fiat money

FINAL EXAM The Money Mystery Challenge 1

Questions 30

FINAL EXAM The Money Mystery Challenge 1

Questions 30