Skip to ContentGo to accessibility pageKeyboard shortcuts menu
OpenStax Logo
Principles of Economics 2e

Review Questions

Principles of Economics 2eReview Questions

7.

What are the four functions that money serves?

8.

How does the existence of money simplify the process of buying and selling?

9.

What is the double-coincidence of wants?

10.

What components of money do we count as part of M1?

11.

What components of money do we count in M2?

12.

Why do we call a bank a financial intermediary?

13.

What does a balance sheet show?

14.

What are a bank's assets? What are its liabilities?

15.

How do you calculate a bank's net worth?

16.

How can a bank end up with negative net worth?

17.

What is the asset-liability time mismatch that all banks face?

18.

What is the risk if a bank does not diversify its loans?

19.

How do banks create money?

20.

What is the formula for the money multiplier?

Citation/Attribution

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:
    Access for free at https://openstax.org/books/principles-economics-2e/pages/1-introduction
  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:
    Access for free at https://openstax.org/books/principles-economics-2e/pages/1-introduction
Citation information

© Jun 15, 2022 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.