Brief Principles Of Macroeconomics 6th Edition By N. Gregory Mankiw – Test Bank

Chapter 11 The Monetary System
MULTIPLE CHOICE
1. You use U.S. currency to pay the owner of a restaurant for a delicious meal. The currency
a. has no intrinsic value. The exchange is an example of barter.
b. has no intrinsic value. The exchange is not an example of barter.
c. has intrinsic value. The exchange is not an example of barter.
d. has intrinsic value. The exchange is not an example of barter.
ANS: B DIF: 1 REF: 11-0 NAT: Analytic
LOC: The role of money TOP: Barter MSC: Interpretive
2. Which of the following is an example of barter?
a. A parent gives a teenager a $10 bill in exchange for her babysitting services.
b. A homeowner gives an exterminator a check for $50 in exchange for extermination services.
c. A barber gives a plumber a haircut in exchange for the plumber fixing the barber’s leaky faucet.
d. All of the above are examples of barter.
ANS: C DIF: 2 REF: 11-0 NAT: Analytic
LOC: The study of economics and definitions in economics TOP: Barter
MSC: Applicative
3. A double coincidence of wants
a. is required when there is no item in an economy that is widely accepted in exchange for goods and services.
b. is required in an economy that relies on barter.
c. is a hindrance to the allocation of resources when it is required for trade.
d. All of the above are correct.
ANS: D DIF: 1 REF: 11-0 NAT: Analytic
LOC: The role of money TOP: Barter MSC: Interpretive
4. Consider the following traders who meet.
Bob has an apple wants an orange
Ted has an orange wants a peach
Mary has a pear wants an apple
Alice has a peach wants an orange
Which, if any, pairs of traders has a double coincidence of wants?
a. Bob with Alice
b. Ted with Alice
c. Bob with Mary, Ted with Bob, and Ted with Alice
d. None of the pairs above has a double coincidence of wants.
ANS: B DIF: 1 REF: 11-0 NAT: Analytic
LOC: The role of money TOP: Barter MSC: Applicative
5. Consider four survivors on an island.
Rupert has machete wants fishing spear
Amber has cooking pot wants fishing spear
Rob has fishing spear wants machete
Tom has cooking pot wants machete
Which of the following pairs of survivors has a double-coincidence of wants?
a. Rupert with Amber, and Rob with Tom
b. Amber with Tom
c. Rupert with Rob
d. None of the above are correct.
ANS: C DIF: 1 REF: 11-0 NAT: Analytic
LOC: The role of money TOP: Barter MSC: Applicative
6. Consider five individuals with different occupations.
Allen prepares taxes wants ribs
Betty does dry cleaning wants computer fixed
Calvin fixes computers wants bread
Diedre bakes bread wants taxes prepared
Eric barbecues ribs wants dry cleaning
In a barter system which of the following pairs has a double coincidence of wants?
a. Allen and Eric
b. Diedre and Calvin
c. Both A and B are correct.
d. None of the above are correct.
ANS: D DIF: 1 REF: 11-0 NAT: Analytic
LOC: The role of money TOP: Barter MSC: Applicative
7. Consider five individuals with different occupations.
Allen prepares taxes wants ribs
Betty does dry cleaning wants computer fixed
Calvin fixes computers wants bread
Diedre bakes bread wants taxes prepared
Eric barbecues ribs wants dry cleaning
If this economy has money
a. Allen will buy from Betty
b. Betty will buy from Calvin
c. Eric will buy from Allen
d. None of the above are correct.
ANS: B DIF: 1 REF: 11-0 NAT: Analytic
LOC: The role of money TOP: Barter MSC: Applicative
8. Consider five high school students working on homework in study hall.
Rosie has math homework wants science homework
Bob has English homework wants history homework
Piper has math homework wants science homework
Dewey has science homework wants English homework
Molly has science homework wants math homework
Which of the following pairs of students has a double coincidence of wants?
a. Rosie and Piper
b. Piper and Molly
c. Dewey and Molly
d. Bob and Dewey
ANS: B DIF: 1 REF: 11-0 NAT: Analytic
LOC: The study of economics and definitions in economics TOP: Barter
MSC: Applicative
9. Consider five individuals with different occupations.
Mary provides legal advice wants knives sharpened
Clark grows tomatoes wants legal advice
Nathan styles hair wants tomatoes
Polly brews beer wants knives sharpened
Paul sharpens knives wants beer
Which of the following pairs of individuals has a double coincidence of wants?
a. Mary and Clark
b. Clark and Nathan
c. Nathan and Polly
d. Polly and Paul
ANS: D DIF: 1 REF: 11-0 NAT: Analytic
LOC: The study of economics and definitions in economics TOP: Barter
MSC: Applicative
10. Money
a. is more efficient than barter.
b. makes trades easier.
c. allows greater specialization.
d. All of the above are correct.
ANS: D DIF: 1 REF: 11-1 NAT: Analytic
LOC: The role of money TOP: Money MSC: Definitional