Financial System and Money Functions Quiz
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Questions and Answers

Which of the following functions of money encourages specialization in the production of goods and services?

  • Store of value
  • Standard of deferred payment
  • Medium of exchange (correct)
  • Unit of account

    • According to the liquidity premium theory of the term structure of interest rates, what is the key assumption about bonds of different maturities?

  • They have different risk levels
  • They are perfect substitutes (correct)
  • They are issued by different entities
  • They have fixed interest rates

    • Which monetary asset is likely to be the least liquid?

  • Savings accounts
  • Money market funds
  • Funds held as certificate of deposits (correct)
  • Cash

    • Which of the following is NOT a financial intermediary?

    <p>A government treasury</p> Signup and view all the answers

    What determines the amount of dividends paid to stock owners?

    <p>The company's performance</p> Signup and view all the answers

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