Chapter 25 Post Quiz
Money, Banking, and Financial Markets

Matching Questions:

Match the terms on the left with the definition in the column on the right. Enter the lowercase letter of that definition in the box to the left of the question number.

	1. Medium of exchange	a. consists of coins, paper currency, and checking accounts.
	2. Barter	b. refers to the exchange of goods for other goods.
	3. Money	c. the amount of interest paid per unit of time expressed as a percentage of the amount borrowed.
	4. M1	d. arises from the need for people sometimes to hold money as an asset or store of value.
	5. Savings account	e. corrected of inflation and is the nominal interest rate minus inflation.
	6. Interest rate	f. anything that serves as a commonly accepted medium of exchange.
	7. Present value	g. a function of money.
	8. Real interest rate	h. would be included in M2.
	9. Transactions demand for money	i. the dollar value today of a stream of income over time.
	10. Assets demand for money	j. arises from the need to have money to pay for purchases of goods and services.
	11. Financial intermediaries	k. take deposits of funds from one group and lend them to other groups.
	12. Reserves	l. assets that banks hold in the form of cash or in funds deposited with the central bank.
	13. Money-supply multiplier	m. the ratio of new checking deposits to the increase in reserves.
	14. Liquid	n. can be quickly converted into cash with little or no loss of value.
	15. Financial derivative	o. a financial instrument whose value is based on the values of other assets.