Money That the Government Has Ordered to Be Accepted as Money

question 18

Multiple Choice

Money that the government has ordered to be accepted as money is:

• A) fiat money.
• B) not usable in international transactions.
• C) convertible paper money.
• D) commodity money.

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Definitions:

M2

A measure of the money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits and money market securities.

M1

A measure of the money supply that includes all physical currency, as well as demand deposits, checking accounts, and other liquid assets easily convertible to cash.

Small Denomination Time Deposits

Time-bound deposit accounts in banks with relatively small deposit requirements, offering fixed interest rates for the duration of the deposit term.

Average Price Level

An economic indicator that shows the overall level of prices for goods and services in an economy over a period.