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AP Macroeconomics Money and Banking — practice questions

Explore 142 free Money and Banking questions in AP Macroeconomics Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Money and Banking questions and exercises with answers

Showing questions 1–30 of 142.

Money serving as an intermediary between the buyer and the seller is money acting as a:Read the answer and worked solution →The second function of money named is that money must serve as a:Read the answer and worked solution →Money serving as the ruler by which we measure values is money as a:Read the answer and worked solution →How many definitions of the money supply are given?Read the answer and worked solution →M1 is defined as coins and currency in circulation, traveler's checks and:Read the answer and worked solution →M2 is described as a definition of money that is, compared with M1:Read the answer and worked solution →M2 includes everything in M1 but also adds other types of:Read the answer and worked solution →Savings deposits are described as bank accounts on which you cannot:Read the answer and worked solution →Checkable deposits are counted in M1 because they can easily be used as a:Read the answer and worked solution →A world without money would require what economists call a double coincidence of:Read the answer and worked solution →Banks are described as a critical intermediary in what is called the:Read the answer and worked solution →A balance sheet is described as an accounting tool that lists assets and:Read the answer and worked solution →Net worth is defined as the asset value minus:Read the answer and worked solution →In a multi-bank system, the amount of money the system can create is determined using the:Read the answer and worked solution →A bank's reserves are classified on its balance sheet as:Read the answer and worked solution →Savings deposits sit in M2 rather than M1 because they cannot directly serve as a:Read the answer and worked solution →Cowrie shells used for centuries as a medium of exchange are an example of:Read the answer and worked solution →An economy where every trade needs a double coincidence of wants is best described as one using:Read the answer and worked solution →Pull the rope to the right measureRead the answer and worked solution →Stack the functions of moneyRead the answer and worked solution →Sort the bank balance sheetRead the answer and worked solution →Match each money termRead the answer and worked solution →True or false: money and bankingRead the answer and worked solution →Over the broadest area and longest time in history, the item people used as money was the:Read the answer and worked solution →Economies without money typically rely on:Read the answer and worked solution →Money acting as an intermediary between buyer and seller serves as a:Read the answer and worked solution →Money as the ruler by which we measure values is its role as a:Read the answer and worked solution →Gold, silver and cowrie shells, which have value beyond their use as money, are:Read the answer and worked solution →Money with no intrinsic value that a government declares legal tender is:Read the answer and worked solution →How quickly a financial asset can be used to buy a good or service is its:Read the answer and worked solution →

Worked practice questions

Money serving as an intermediary between the buyer and the seller is money acting as a:

  1. Medium of exchange
  2. Store of value
  3. Unit of account
  4. Source of credit
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Correct answer: A. Medium of exchange

1. Money is defined by the jobs it performs. 2. First, money serves as a medium of exchange. 3. That means money acts as an intermediary between the buyer and the seller. 4. Store of value and unit of account are its other two functions. _Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 13 'Money and Banking'_

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The second function of money named is that money must serve as a:

  1. Means of taxation
  2. Store of value
  3. Medium of exchange
  4. Unit of account
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Correct answer: B. Store of value

1. The three functions are given in a fixed order. 2. First, money serves as a medium of exchange. 3. Second, money must serve as a store of value. 4. Third, money serves as a unit of account. _Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 13 'Money and Banking'_

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Money serving as the ruler by which we measure values is money as a:

  1. Unit of account
  2. Store of value
  3. Medium of exchange
  4. Method of saving
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Correct answer: A. Unit of account

1. The third function is about measurement rather than exchange. 2. Money serves as a medium of exchange and as a store of value. 3. Third, money serves as a unit of account. 4. That means it is the ruler by which we measure values. _Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 13 'Money and Banking'_

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