Who Wants to be a Millionaire!?

Monetary Policy

Fastest Finger Question #1:

List the following groups in order based on salary:

(starting with the least)

A. Teacher A. Teacher B. Airline pilotB. Airline pilotC. Carpenter C. Carpenter

…And the Winner Is…

C. CarpenterC. CarpenterA. Teacher A. Teacher B. Pilot B. Pilot

Road to Riches…

1 Ex1 Ex 2 Extr2 Extr 3 Extra 3 Extra 4 Extra Cre4 Extra Cre 5 Extra Credit5 Extra Credit ASK A

FRIEND!50/50

Money that has an alternative use: (1 Point)

A. Fiat moneyA. Fiat money C. Convertible C. Convertible moneymoney

B. Commodity B. Commodity moneymoney

D. Monopoly D. Monopoly money money

Something accepted by all parties as payment for goods and services

(2 Points)

A. Currency A. Currency C. Fiat MoneyC. Fiat Money

B. Medium of B. Medium of exchangeexchange

D. Gold D. Gold

The interest rate the Fed. Charges its member banks? (4 Points)

A. Prime rateA. Prime rate C. Excessive rateC. Excessive rate

B. Discount rateB. Discount rate D. Reserve rateD. Reserve rate

Rule stating that a percentage of every deposit be set aside as legal reserves:

(6 Points)

A. Discount rateA. Discount rate C. Reserve C. Reserve requirementrequirement

B. Gold standardB. Gold standard D. Excess D. Excess reservesreserves

Excessive increases in the monetary supply lead to:

(8 Points!)

A. Deflation A. Deflation C. Inflation C. Inflation

B. Low interest B. Low interest ratesrates

D. High interest D. High interest ratesrates

List the following commodities by price – lowest to highest:

A. Silver A. Silver B. PlatinumB. PlatinumC. Gold C. Gold

…And the Winner Is…

A. A. Silver Silver C. C. Gold Gold B. B. Platinum Platinum

The Fed. Must constantly choose between two evils. They are:

(1 Point)

A. Consumers A. Consumers C. Inflation C. Inflation

B. Banks B. Banks D. Recession D. Recession

The Fed. does all of the following services EXCEPT:

(2 Points)

A. Oversees the A. Oversees the activities of the activities of the Treasury Dept.Treasury Dept.

C. Enforces C. Enforces consumer consumer legislationlegislation

B. Maintains B. Maintains currency / coinscurrency / coins

D. Clears checksD. Clears checks

Which scenario indicates ‘easy/loose money policy’:

(4 Points)

A. Selling gov. A. Selling gov. securitiessecurities

C. Raising the C. Raising the discount ratediscount rate

B. Decreasing B. Decreasing the reserve the reserve requirementrequirement

D. Raising the D. Raising the price of milkprice of milk

How does the gov. measure inflation from year to year?

(6 Points)

A. Current GDPA. Current GDP C. Producer price C. Producer price indexindex

B. GDP price B. GDP price deflatordeflator

D. Consumer D. Consumer price indexprice index

Which is a good explanation of the wage-price spiral?

(8 Points)

A. Fed. Produces A. Fed. Produces more money, so more money, so wages go upwages go up

C. Prices drop, C. Prices drop, then wages dropthen wages drop

B. Wages go up B. Wages go up when prices risewhen prices rise

D. A funnel D. A funnel cloud produces cloud produces by high wagesby high wages

List the following from lowest to highest percentage:

A. Rate for studentsA. Rate for students B. Prime rateB. Prime rate C. Discount rateC. Discount rate

…And the Winner Is…

C. C. discount ratediscount rate B. B. prime rateprime rate A. A. rate for studentsrate for students

Our current money is ? (1 Point)

A. Specie moneyA. Specie money C. Backed by C. Backed by silversilver

B. Inconvertible B. Inconvertible fiat moneyfiat money

D. worthlessD. worthless

Properties, possessions…stuff you have?

(2 Points)

A. assetsA. assets C. liquidityC. liquidity

B. liabilitiesB. liabilities D. balancesD. balances

Our current money has value because?

(4 Points)

A. It is backed A. It is backed by the gold std.by the gold std.

C. It is portable, C. It is portable, durable, and durable, and divisibledivisible

B. Government B. Government said you must use said you must use itit

D. Public D. Public confidence in itconfidence in it

If a person robs a bank and your money is stolen, the gov. will insure it:

(6 Points)

A. TrueA. True C. Only up to C. Only up to $1,000$1,000

B. FalseB. False D. Only if the D. Only if the robber gets awayrobber gets away

How does the Fed. influence your purchasing power?

(8 Points)

A. They A. They incentivize incentivize borrowingborrowing

C. They control the C. They control the CPICPI

B. They set prices B. They set prices of consumer goodsof consumer goods

D. They decide D. They decide whether your check whether your check is good or notis good or not

List the following items in order based on percentage charged by banks:

(starting with the lowest)

A. Credit card A. Credit card B. Car loanB. Car loanC. Mortgage (home loan) C. Mortgage (home loan)

…And the Winner Is…

C. Mortgage (home loan)C. Mortgage (home loan)B. Car loanB. Car loanA. Credit cardA. Credit card

Who might get hurt by inflation?(1 Point)

A. Consumers who A. Consumers who don’t get a raisedon’t get a raise

C. People with C. People with credit card debtcredit card debt

B. Investors in the B. Investors in the stock marketstock market

D. Gold D. Gold speculatorsspeculators

If the FED loaned BofA $10,000 at 5% interest, how much money will

they make over one year?(2 Points)

A. $5A. $5 C. $500C. $500

B. $50B. $50 D. $0 – D. $0 – the Fed the Fed doesn’t make a profit b/c doesn’t make a profit b/c they are part of the they are part of the governmentgovernment

If the Treasury Dept. and FED wanted to encourage loose money

policy, they might?(3 Points)

A. Raise the A. Raise the reserve requirementreserve requirement

C. Raise the C. Raise the Discount RateDiscount Rate

B. Lower the B. Lower the reserve requirementreserve requirement

D. Not wear a beltD. Not wear a belt

Which would be an example of commodity money?

(4 Points)

A. A. C. C.

B. B. D. Dolphin TeethD. Dolphin Teeth

If the FED used open market operations to get money out of

circulation / fight inflation, it would?(5 Points)

A. Sell t-billsA. Sell t-bills C. Print moneyC. Print money

B. Buy t-billsB. Buy t-bills D. Lower interest D. Lower interest ratesrates