21. Which of the following is not a function of money?
It makes trading goods and services more efficient.
It helps us express the value of a good or service.
It gives society a national symbol of pride.
It provides a way to store value, or "purchasing power."
Review
22. Counterfeiting is
creating a fake version of something valuable.
countering with a new offer in negotiations.
when the government makes a law about money.
purchasing stolen goods.
Review
23. Counterfeit activity
lowers people's acceptance of currency.
destroys currency in circulation.
leads to currency being taken out of circulation.
increases overall demand for legal currency.
Review
24. Sales tax is an example of a
proportional tax.
income tax.
progressive tax.
regressive tax.
Review
25. Income tax is an example of
a direct tax
the cost of banking.
wealth distribution.
a flat tax.
Review
26. Reading from left to right, which list shows the tax types that proportionally increase with a rise in income?
progressive, regressive, proportional
proportional, regressive, progressive
regressive, progressive, proportional
regressive, proportional, progressive
Review
27. The monetary policy tool in use on a daily basis is
tax law.
the discount rate.
the reserve requirement.
open market operations.
Review
28.
When the economy is operating at point B, the Federal Reserve is most likely to follow
expansionary fiscal policy.
contractionary fiscal policy.
expansionary monetary policy.
contractionary monetary policy.
Review
29. Unemployment is on the rise though inflation is quite low. Gross Domestic Product is rising but more slowly than the goal rate. The Federal Reserve may buy government securities in open market operations in order to
increase the money supply and encourage economic growth.
decrease the money supply and encourage people to save in difficult times.
give consumers more money to open their own businesses.
force the banks to stop giving out loans in an uncertain economy.
Review
30. [02.09]Governments use wage and price controls in an attempt to
monitor business profits.
protect business interests.
encourage economic growth.
control citizens' spending habits.

