BADM 7200 -FINAL Exam Questions
with Guaranteed Pass Solutions 2025-
2026 Updated.
_____ is any asset that people are generally willing to accept in exchange for goods and services
or for payments of debts. - Answer Money
An _____ is anything of value owned by a person or firm - Answer asset
_____ _____ are economies in which goods and services are traded directly for other goods and
services - Answer Barter economies
Barter economies can be problematic because they require a _____ _____ _____ _____ -
Answer double coincidence of wants
_____ _____ is a good used as money that also has value independently of its use of money.
Ex: Cigarettes in POW camps during WWII - Answer Commodity money
_____ within an economy is difficult to achieve without money - Answer Specialization
The grocery store accepts money in exchange for crawfish - Answer Medium of change
In a barter system, 10 lbs of crawfish might be worth 3 lbs of shrimp, which might be worth 20
lbs of rice... With money, each respective good can have a "price" - Answer Unit of account
Money allows value to be stored - Answer Store of value
Money is not the only store of value but money is the most... - Answer liquid store of value
What type of money has value independently of its use as money? - Answer commodity
money
What is an example of commodity money? - Answer Gold
_____ _____ is difficult to use, because it can be of heterogeneous purity. For instance, one can
mix gold with another metal that would be very difficult to identify in day-to-day use - Answer
Commodity money
, Money, such s paper currency, that is authorized by a central bank or government that does not
have to be exchanged by the central banker gold or some other commodity - Answer Fiat
money
Currency is issued by the _____ _____, which is the central bank of the United States - Answer
Federal Reserve
_____ is the narrowest definition of money - Answer M1
M1 = - Answer currency + value of all checking accounts at banks
_____ is a broader definition of money - Answer M2
M2 = - Answer M1 + savings accounts + certificate of deposits (CDs) + money market mutual
funds
_____ are deposits that a bank has retained, rather than loaned out or invested - Answer
reserves
_____ _____ are reserves that a bank is legally required to hold, based on its checking account
deposits - Answer required reserves
_____ _____ _____ is the minimum fraction of deposit banks are required by law to keep as
reserves - Answer required reserve ratio
_____ _____ are reserves that banks hold greater than legal requirement - Answer excess
reserves
Because banks lend money, they can... - Answer create money in the economy
a rule of thumb is that the deposit multiplier is about _____. - Answer 2.5
In the United States (and nearly all other developed countries) _____ _____ _____ is used. -
Answer fractional reserve banking
When the banking system keeps less than 100% of the deposits as reserves - Answer
fractional reserve banking
with Guaranteed Pass Solutions 2025-
2026 Updated.
_____ is any asset that people are generally willing to accept in exchange for goods and services
or for payments of debts. - Answer Money
An _____ is anything of value owned by a person or firm - Answer asset
_____ _____ are economies in which goods and services are traded directly for other goods and
services - Answer Barter economies
Barter economies can be problematic because they require a _____ _____ _____ _____ -
Answer double coincidence of wants
_____ _____ is a good used as money that also has value independently of its use of money.
Ex: Cigarettes in POW camps during WWII - Answer Commodity money
_____ within an economy is difficult to achieve without money - Answer Specialization
The grocery store accepts money in exchange for crawfish - Answer Medium of change
In a barter system, 10 lbs of crawfish might be worth 3 lbs of shrimp, which might be worth 20
lbs of rice... With money, each respective good can have a "price" - Answer Unit of account
Money allows value to be stored - Answer Store of value
Money is not the only store of value but money is the most... - Answer liquid store of value
What type of money has value independently of its use as money? - Answer commodity
money
What is an example of commodity money? - Answer Gold
_____ _____ is difficult to use, because it can be of heterogeneous purity. For instance, one can
mix gold with another metal that would be very difficult to identify in day-to-day use - Answer
Commodity money
, Money, such s paper currency, that is authorized by a central bank or government that does not
have to be exchanged by the central banker gold or some other commodity - Answer Fiat
money
Currency is issued by the _____ _____, which is the central bank of the United States - Answer
Federal Reserve
_____ is the narrowest definition of money - Answer M1
M1 = - Answer currency + value of all checking accounts at banks
_____ is a broader definition of money - Answer M2
M2 = - Answer M1 + savings accounts + certificate of deposits (CDs) + money market mutual
funds
_____ are deposits that a bank has retained, rather than loaned out or invested - Answer
reserves
_____ _____ are reserves that a bank is legally required to hold, based on its checking account
deposits - Answer required reserves
_____ _____ _____ is the minimum fraction of deposit banks are required by law to keep as
reserves - Answer required reserve ratio
_____ _____ are reserves that banks hold greater than legal requirement - Answer excess
reserves
Because banks lend money, they can... - Answer create money in the economy
a rule of thumb is that the deposit multiplier is about _____. - Answer 2.5
In the United States (and nearly all other developed countries) _____ _____ _____ is used. -
Answer fractional reserve banking
When the banking system keeps less than 100% of the deposits as reserves - Answer
fractional reserve banking
