Question 1

Any object or objects that a group of people use to buy and sell goods and services are known as which of the following?

Accepted Answer

Money is the medium of exchange used by a group of people to buy and sell goods and services. Capital refers to assets used to generate income, countertrades are a type of trade agreement, and revenue is the income earned by a company or organization.

Question 2

The Canadian money supply comprises which of the following items?

Accepted Answer

C

Question 3

What are money market deposit accounts and certificates of deposit officially called?

Accepted Answer

Money market deposit accounts and certificates of deposit are officially called time deposits, meaning that the funds deposited are "locked in" for a specific amount of time (usually ranging from a few months to several years) before they can be withdrawn without penalty.

Question 4

Which of the following is an activity performed by the Bank of Canada as it carries out its monetary policy?

Accepted Answer

The Bank of Canada is responsible for maintaining the stability and efficiency of the financial system, which includes distributing and regulating the supply of currency in Canada. A, B, and D are not activities performed by the Bank of Canada in relation to its monetary policy.

Question 5

A savings account is also known as which of the following?

Accepted Answer

A savings account is a type of time deposit, meaning that the money is deposited for a certain period of time and cannot be withdrawn without penalty before the maturity date.  Choices B, C, and D do not accurately describe a savings account.

Question 6

Which of the following are deposits at a bank or other financial institution that pay interest but cannot be withdrawn on demand without penalty?

Accepted Answer

Time deposits are accounts at a bank or other financial institution that pay interest but have a fixed term, such as six months or one year. These accounts cannot be withdrawn on demand without penalty, meaning that if the money is withdrawn before the term is up, a fee may be charged. This type of account is also known as a certificate of deposit (CD). Marketable securities are investments that can be easily bought and sold, such as stocks and bonds. Demand deposits and commercial deposits are both types of accounts that allow for easy withdrawal on demand without penalty.

Question 7

Boulders,building tresses,and lead ingots would not make good mediums of exchange because they lack key characteristic?

Accepted Answer

Boulders, building tresses, and lead ingots are all very heavy and cumbersome, making them difficult to transport and exchange in large quantities. Portability is a key characteristic of a good medium of exchange - it should be easy to carry and transfer from one person to another.

Question 8

For money to be an acceptable medium of exchange which of the following are necessary?

Accepted Answer

For money to function as a medium of exchange, it must possess certain characteristics. These include being scarce, so that there is a limited amount of it in circulation; divisible, so that it can be broken down into smaller units; portable, so that it can be easily carried and used in transactions; and durable, so that it does not wear out or deteriorate quickly. Option A satisfies all of these criteria. Options B, C, and D do not include all of the necessary characteristics for money to be an acceptable medium of exchange.

Question 9

Megan Voorhees recently inherited $200,000.She has invested the inherited money in real estate and government securities.Voorhees is using her money for which of the following purposes?

Accepted Answer

Megan Voorhees is using her inherited money as a store of value by investing it in real estate and government securities. These investments hold and preserve value over time, allowing her to maintain and potentially grow her wealth.

Question 10

Rocks,leaves,and glass shards would not make good mediums of exchange because they lack which of the following key characteristics?

Accepted Answer

The key characteristic that rocks, leaves, and glass shards lack is scarcity. Scarcity refers to the limited availability of a resource, which gives it value as a medium of exchange. These items are too readily available and abundant to be considered valuable for use as currency. While portability, durability, and divisibility are all important characteristics of a good medium of exchange, these items may possess some or all of these characteristics, but their abundance makes them worthless.

Question 11

The most important function of the Bank of Canada is implementing which of the following policies?

Accepted Answer

The Bank of Canada's most important function is to implement monetary policy, which involves controlling the money supply and interest rates in order to achieve the government's inflation targets and stabilize the economy. The other policies listed (fiscal, tax, and spending) are all under the purview of the government, not the central bank.

Question 12

Which of the following would be described as anything that is acceptable as payment for goods and services?

Accepted Answer

Money is the most commonly accepted form of payment for goods and services. Shareholders' equity and capital are forms of funding for a business, while fixed assets are physical items owned by the company.

Question 13

What is another term for a chequing account?

Accepted Answer

A chequing account is also known as a demand deposit account, as funds are available for withdrawal on demand. A treasury account is a type of account used by the government to manage its finances. A time deposit is a type of savings account where funds are kept for a specified period of time. A certificate of deposit is a type of time deposit where funds are invested for a set period of time at a fixed interest rate.

Question 14

A ten-dollar bill can be changed into two five-dollar bills or ten loonies.This key characteristic of money is known as which of the following?

Accepted Answer

Divisibility refers to the ability of money to be easily divided into smaller units without losing its value. In this case, a ten-dollar bill can be divided into two five-dollar bills or ten loonies, demonstrating the characteristic of divisibility.

Question 15

Which of the following is one of the key characteristics required in order for money to be an acceptable medium of exchange?

Accepted Answer

The answer of Which of the following is one of...

Question 16

Suppose a six-year-old girl wants to buy a $30 Hello Kitty doll.The money she received for her birthday to buy the doll would be used for which of the following purposes?

Accepted Answer

The money the girl received for her birthday is being used as a medium of exchange, since she is using it to purchase something.

Question 17

Cherries,ears of corn,and cookies would not make good mediums of exchange because they lack which key characteristic?

Accepted Answer

The answer of Cherries,ears of corn,and cookies would not make...

Question 18

Which of the following BEST describes credit cards?

Accepted Answer

Credit cards allow users to make purchases without immediately paying the full amount. Instead, the payment is deferred to a later point in time, often with interest added. Therefore, D is the best choice as it accurately describes what credit cards do. A, B, and C are not accurate descriptions of credit cards.

Question 19

What is cash held in the form of coins and paper money?

Accepted Answer

Cash held in the form of coins and paper money is commonly referred to as currency.

Question 20

Kate Tankersly pays her bills each month by writing cheques.Tankersly is using which of the following type of account?

Accepted Answer

Tankersly is using a demand deposit account, which is also known as a checking account. This type of account allows the account holder to write checks or use a debit card to withdraw funds as needed. Choice A and B both refer to specific types of savings accounts, and choice D does not refer to any commonly known type of bank account.

Quiz 15: Understanding Money, financial Institutions, and the Securities Markets