Question 6.6666 out of 6.6666 points A system of barter has substantial transactions costs because

02 Jun Question 6.6666 out of 6.6666 points A system of barter has substantial transactions costs because

Question
6.6666 out of 6.6666 points
A system of barter has substantial transactions costs because

Answers:

taxes under such a system are generally a large fraction of the value of output.

traders must spend considerable time searching for trading partners.

the uncertainties of trade result in high legal fees being incurred to draw up binding contracts.

the uncertainties of trade result in high insurance premiums.

Question 2
6.6676 out of 6.6676 points

Monetary policy refers to the government’s

Answers:

decisions on how much money to spend.

decisions on how much money to collect in taxes.

plans for retiring the national debt.

management of the money supply and interest rates to achieve macroeconomic objectives.

Question 3
6.6666 out of 6.6666 points

At the beginning of the financial crisis, banks were hurt by all of the following EXCEPT

Answers:

declines in the value of mortgage-backed securities.

defaults on mortgages by those with subprime mortgages.

holding too many Treasury bonds.

not being repaid on loans to real estate developers.

Question 4
6.6666 out of 6.6666 points

Which of the following is NOT a key financial service provided by the financial system?

Answers:

risk sharing

profitability

liquidity

information

Question 5
6.6666 out of 6.6666 points

Economists define money as

Answers:

cash in circulation.

deposits in commercial banks.

anything that people are willing to accept in payment for goods and services or to pay off debts.

bonds issued by large corporations.

Question 6
6.6666 out of 6.6666 points

The financial system is primarily a means by which

Answers:

funds are transferred from savers to borrowers.

money is put into circulation.

the government puts into operation its plans for the economy.

business firms distribute their goods.

Question 7
6.6666 out of 6.6666 points

Money can BEST be described as:

Answers:

anything that is generally accepted as payment for goods and services or in the settlement of debts.

paper that can be used to purchase goods and services

commodities that have intrinsic value

any form of wealth possessed by consumers

Question 8
6.6666 out of 6.6666 points

Fannie Mae and Freddie Mac both

Answers:

sell bonds to investors and use the funds to purchase mortgages.

help regulate the banking system.

directly lend funds to people seeking mortgages.

reduce access to funds for mortgages by purchasing existing mortgages.

Question 9
6.6666 out of 6.6666 points

Barter is

Answers:

another name for money.

an exchange of goods and services directly for goods and services.

the basis for economic specialization.

the main system of exchange in the United States today.