ANSWER OUTLINE
ECONOMICS 353 (SECTION 1) L. Tesfatsion/Spring 99
EXERCISE SET 3: 5 POINTS TOTAL DUE: Tuesday, February 9, 9:30 A.M.
*IMPORTANT REMINDER: LATE ASSIGNMENTS CANNOT BE ACCEPTED -- NO EXCEPTIONS*
Please FILL IN YOUR NAME on Side 1 of the accompanying General Purpose
NCS Answer Sheet and use a #2 pencil to MARK YOUR ANSWERS on Side 1 of this
Answer Sheet to the following five multiple choice questions. [If you missed
class and did not receive an answer sheet, you can pick one up at the office
of my secretary, Sue Streeter, in Heady Hall 382 (4-6600).]
1-1. The conversion of a barter economy to one that uses money increases
efficiency by reducing
A. the need to exchange goods
B. the need to specialize
C. the need to employ team production methods
D D. transactions costs
2-1. If there are four goods in a barter economy (i.e., an economy in which
no money is used), then one needs to know six prices in order to exchange one
good for another. If, however, there are six goods in a barter economy, one
needs to know ______ prices in order to exchange one good for another.
A A. 15
B. 12
C. 9
D. 6
3-1. Checkable deposits are money in the United States because
A. federal regulations mandate that they be so considered
B B. they serve as a medium of exchange
C. only banks can offer checkable deposit accounts to savers
D. both A and B
E. both A and C
4-1. Whatever a society uses as money, the distinguishing characteristic is
that
A. it must be completely inflation proof
B B. it must be generally acceptable as payment for goods and services
and the repayment of debt
C. it must contain some amount of a valued commodity
D. it must be produced by government
5-1. Economists find no completely satisfactory way to measure the money
supply because
A. some needed financial asset statistics are not publicly released
B B. the "moneyness" of an asset is a matter of degree
C. economists are ideologically divided concerning the general
meaning of money
D. economists receive insufficient statistical training
