Title: Money
Course: Demo 1

Q: Types of money include:
- coins
- paper bills
- credit cards
A: coins; paper bills

Q: Marty goes to a concert with his friends and wants to buy a t-shirt as a souvenir of the event. He pays the vendor with a $50 bill and gets change back. Later his friend Doc wants to buy a hot pretzel but is 50 cents short. Marty gives him 2 quarters. On the way home Marty stops and puts gas in his car and pays with his Visa. In which of these transactions did Marty actually use money?
- T-shirt purchase
- Doc’s purchase of a pretzel
- Gas purchase
A: T-shirt purchase; Doc’s purchase of a pretzel

Q: Although money has no intrinsic value, it is demanded throughout society. Among the reasons that money is demanded are:
- it stores value.
- It can be used as a medium of exchange.
- it can be used as a measurement of value of goods and/or services.
- it measures value.
A: it stores value.; It can be used as a medium of exchange.; it can be used as a measurement of value of goods and/or services.; it measures value.

Q: For money to function as a medium of exchange it must be:
- difficult to counterfeit
- durable
- colorful
A: difficult to counterfeit; durable

Q: The nation of Newbie is establishing its monetary system and is designing its currency. The first proposal is to issue the Newbie Nugget (their new currency) in only 3 denominations of paper bills (%100, %500 and %1000 Newbie bills) but no coinage. In order to save time and resources they will print their currency on a heavy stock cardboard. The bills will be about the size of a business card so that the Newbian people will be able to easily carry it with them in their wallets. Why will the Newbie Nugget not function as a medium of exchange?
- It is too small to have value.
- It will be easy to counterfeit or destroy bills printed on cardboard.
- It is not easily divisible.
A: It is not easily divisible.

Q: An individual walks to a local sandwich shop and uses a $10 bill to pay for a $6 sandwich, receiving $4 as change for this transaction. This illustrates that as a medium of exchange this $10 bill is:
- portable
- divisible
- bartered
A: portable; divisible

Q: An individual walks to a local sandwich shop and uses a $10 bill to pay for a $6 sandwich, receiving $4 as change for this transaction. The $6 price of the sandwich:
- represents the value the seller wants for the sandwich.
- is a precise measurement of the value of the sandwich.
- is the result of a bartered transaction.
A: represents the value the seller wants for the sandwich.; is a precise measurement of the value of the sandwich.

Q: You need to have your gutters cleaned in the spring but have no ladder and are really afraid of heights. Buddy lives down the street and owns a roofing business. You contact Buddy and ask him if he will come clean out your gutters and in exchange you will make him a wreath he can hang on his door at the holidays. He agrees to the exchange of these two assets. What type of system have you used in this transaction?
- Monetary system because each thing has value.
- A mixed system because he can sell your wreath for cash but you can’t sell your clean gutters.
- A barter system because each person gets something of value.
A: A barter system because each person gets something of value.

Q: A neighbor has apple trees to harvest but no time to do it. The Peterson family has time to harvest but doesn’t want to work for apples. The Peterson’s are hoping to take a vacation next summer, so instead of apples, they agree to be paid $200 for their work. This illustrates that money:
- stores value.
- is a measure of value.
- is the only means of exchanging goods for services.
A: stores value.; is a measure of value.

Q: The federal government tracks the amount of money that is in the system at any given time using which of the following measurements?
- Only the amount of money in people’s savings accounts on January 1st.
- The number of bills printed by the US Treasury in the previous year.
- The total amount of cash held in people’s bank accounts throughout the year.
A: The total amount of cash held in people’s bank accounts throughout the year.