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AP Macro Unit 4 The Financial Sector, Money and Monetary Policy

Quiz by Mark Stegall

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36 questions
Show answers
  • Q1
    Because any merchant will accept money in exchange for goods and services, money is useful as a
    store of value
    method to incur ad pay back loans and debt
    medium of exchange
    unit of account
    30s
  • Q2
    Which of the following is NOT a function of fiat money?
    A medium of exchange
    A store of value
    A unit of account
    A source of intrinsic value
    30s
  • Q3
    Dennis decides to loan his friend some money. He would like to see a 5% return on the loan. If the current rate of inflation is 15%, what should he charge as an interest rate?
    25%
    12%
    10%
    20 %
    30s
  • Q4
    Sally decides to purchase an apartment complex. She would like to earn a 10% return on the apartment complex. If the current rate of inflation is -2%, what return does Sally need to invest in the apartment complex?
    12%
    14%
    8%
    6%
    30s
  • Q5
    When a consumer decides to purchase a bond instead of holding cash, the consumer is giving up
    investment income
    liquidity
    investment risk
    a store of value
    30s
  • Q6
    Which of the following would be considered a major component of the money supply M1?
    money market accounts
    bonds
    savings deposits
    checkable deposits
    30s
  • Q7
    According to the preceding list of items, which are considered to be part of the M1 money supply?
    Question Image
    I and V
    III and V
    I and II
    III and IV
    30s
  • Q8
    According to the preceding list of items, which are considered to be part of the M2 money supply?
    Question Image
    I and II
    I, II, and III, and IV
    IV and V
    I, II, III, IV, and V
    30s
  • Q9
    Jacob transgers $2000 from his savings account to his checking account. What effect will this transfer have on the M1 and M2 money supply?
    M1 will increase and M2 will increase
    M1 will increase and M2 will decrease
    M1 increase and M2 increase
    M1 will increase and M2 will remain the same
    30s
  • Q10
    Anna recently celebrated her 18th birthday. In many of her birthday cards, she found slips of paper from the U.S. government promising to repay a loan at a fixed interest rate. These slips of paper are known as.
    shares
    bonds
    stocks
    bank loans
    30s
  • Q11
    A stock is
    a claim of ownership in a business
    All answers provided are correct.
    a guarantee of future prices to be traded on the stock market
    a certificate of indebtedness
    30s
  • Q12
    M2 money supply refers to
    time deposits only
    M1 money, savings, accounts, tome deposits, and non-institutional money market funds
    savings accounts only
    no answer provided is correct.
    30s
  • Q13
    Anna recently celebrated her 18th birthday. In many of her birthday cards, she found slips of paper from the U.S. government promising to repay a loan at a fixed interest rate. These slips of paper are known as
    stocks
    bank loans
    shares
    bonds
    30s
  • Q14
    According to the list of items, which are considered to be part of the M1 money supply?
    Question Image
    III and V
    III and IV
    I and V
    I and II
    30s
  • Q15
    According to the preceding list of items, which are considered to be part of the M2 money supply?
    Question Image
    II, II, III, IV and V
    IV and B
    I and II
    I, II, and III
    30s

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