Multiple…CHOICE!!?
1 – The main disadvantage of using shells as money, instead of coins, would be a lack of:
a – durability.
b – portability.
c – uniformity.
d – divisibility.
2 – An example of representative money would be:
a – a fur coat.
b – diamonds.
c – gold earrings.
d – an IOU note.
3 – _________ is / are NOT example of a liquid asset.
a – A certificate of deposit
b – Cash
c – Traveler’s checks
d – A checking account
4 – A _________ is an example of a financial intermediary.
a – life insurance company
b – stock certificate
c – bank vault
d – bond
5 – You do not have to pay state taxes on interest earned on:
a – corporate bonds.
b – money market mutual funds.
c – junk bonds.
d – municiple bonds.
Thank you!
1. c (since no two shells are the same size, there’s no “standard”)
2. d (IOU can be exchanged for a specific amount of money)
3. a (all are technically liquid assets since they can all be easily converted to cash, but CD’s involve a penalty for early withdrawl)
4. a (only the life insurance company is an institution that can service savers/lenders and spenders/borrowers)
5. d (assuming the municipal bonds are issued within the state in which taxes are paid)
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