AnswersHSA 26-27 EconomicsMoney

Money Answers

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What kind of money is a gold certificate considered to be?

A
commodity
B
fiat
C
representative
D
currency
2
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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
3

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.
4

Why must old currency be taken out of circulation when new currency is made?

A
The old currency is more valuable than the new currency.
B
The new currency is much more liquid than the old currency.
C
Too much currency in an economic system will cause inflation.
D
Too much currency in an economic system will create artificial wealth.
5

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.
6

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.
7

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.
9

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.
10

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.
11

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.
12

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
13

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.
14

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

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