AnswersHSA 26-27 EconomicsMoney

Money Answers

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1
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People might choose to use a debit card rather than cash for purchases because

A
they do not want to carry around large amounts of cash.
B
their banking institutions charge high fees for cash withdrawals.
C
most items cost less when purchased with a debit card.
D
debit cards have a higher value than cash and can buy more.
2
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Which of these scenarios involves commodity money?

A
A girl writes a check to her friend for a stack of valuable comic books.
B
A boy starts a lemonade stand and sells each drink for twenty-five cents.
C
A woman offers her neighbor a US silver dollar in exchange for a bicycle.
D
A man buys some T-shirts and pays with a US fifty-dollar bill.
3

A currency’s exchange rate is

A
how many denominations the currency has.
B
its stable rate as established by the government.
C
how easily it can be divided into other currencies.
D
its changing value relative to other currencies.
4

Exchange rates can indicate economic health by

A
showing exactly how much of each nation’s currency is liquid.
B
revealing how much of each nation’s income goes to savings.
C
showing the relative strength of different nations’ currencies.
D
examining spending patterns across nations and continents.
5

A currency is a system of money created and used by

A
an individual or a group of people.
B
all people who live in the same era.
C
a nation or region of the world.
D
a town, city, or state within a region.
6

What types of money are included in the M2 category? Check all that apply.

A
currency
B
savings accounts
C
checking accounts
D
commodity money
E
short-term investment accounts
7

In the United States, dollar bills, nickels, and dimes are

A
representative money.
B
commodity money.
C
various currencies.
D
different denominations.
8

What would happen if currency in all countries had fewer denominations, i.e. fewer varieties of coins or numbers of bills?

A
People would be more likely to confuse the value of currencies.
B
Exchanging money between countries would be much easier.
C
People could not charge as many different prices for goods.
D
All goods would be more expensive than they currently are.
9

To barter means to

A
sell.
B
create.
C
trade.
D
earn.
10

What might cause a change in the value of fiat money?

A
a change in the value of commodities
B
a change in government regulations
C
a change in materials used to make money
D
a change in individuals’ spending habits
11

What is one problem that might commonly occur when one is bartering?

A
Someone wants to trade a valuable item for a less valuable one.
B
Two people have different ideas about the value of an item.
C
Someone wants to barter a good in exchange for a service.
D
Two people want to trade items of equal or nearly equal value.
12

The term liquidity refers to

A
how quickly money can be exchanged.
B
the true monetary value of an investment.
C
the shifting supply of money in the economy.
D
how much wealth an individual has amassed.
13

How is using money related to bartering?

A
It is a substitute for bartering.
B
It is the opposite of bartering.
C
It is a newer form of bartering.
D
It is an old form of bartering.
14

When might it be important to know a currency’s exchange rate?

A
when planning expenses for an overseas trip
B
when changing money into smaller denominations
C
when preparing to buy something expensive
D
when deciding which college is the best value
15

Which is an advantage of using modern currency instead of a barter system?

A
risk of a loss in value or counterfeiting
B
difficulty in determining the value of goods
C
ability to store and use a form that is accepted everywhere
D
a limited amount of goods and services available
16

The condition of a country’s depends on its people’s ability to exchange money for goods and services.

Answer not available
17

What gives commodity money its value?

A
a government’s guarantee of its value
B
the type of material with which it is made
C
its rate of exchange in other countries
D
the ability to trade it for a valuable good
18

What is a potential disadvantage of using debit cards when compared to barter and traditional currency?

A
collaborative
B
wide acceptance
C
ease of overspending
D
more privacy and flexibility
19

Which could be a negative factor of a barter system?

A
Both individuals easily agree on the value of their goods.
B
One person may not want or need what the other person is offering.
C
Goods can be exchanged without the need for any physical currency.
D
The process requires money so the two people involved can easily come to an agreement.
20

Which of the following is the least liquid?

A
savings account
B
checking account
C
credit account
D
investment account

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