What makes a hundred dollar bill valuable?
Federal Reserve and Monetary Policy Quiz

Quiz
•
Social Studies
•
Professional Development
•
Easy

MARIA MAR VALDES SOLIS
Used 1+ times
FREE Resource
12 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
It is printed by the government
It is made of rare materials
It has a unique serial number
It is made of special paper
Answer explanation
The correct answer is 'It is printed by the government' because the government's authority and backing give the hundred dollar bill its value.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is fiat money?
Money linked to gold reserves
Money made of metal
Money used in ancient civilizations
Money not linked to any external resource
Answer explanation
Fiat money is not linked to any external resource, so the correct choice is 'Money not linked to any external resource'.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Who sets the monetary policy in the US?
The Executive branch
The Legislative branch
The Federal Reserve System
The Judicial branch
Answer explanation
The Federal Reserve System sets the monetary policy in the US, making it the correct choice.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens if the total amount of currency in circulation increases faster than the total value of goods and services in the economy?
No impact on the economy
Deflation
Stable prices
Inflation
Answer explanation
If the total amount of currency in circulation increases faster than the total value of goods and services in the economy, it leads to inflation as there is more money chasing the same amount of goods and services, causing prices to rise.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of currency?
To be hoarded
To be used as a decorative item
To be exchanged for goods and services
To be used as a collectible item
Answer explanation
The purpose of currency is to be exchanged for goods and services, making it the correct choice.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the potential consequence of too much inflation?
Decrease in business profits
Decrease in consumer spending
Stimulated business
Overconsumption
Answer explanation
Too much inflation can lead to overconsumption as people may spend more due to the decrease in the value of money.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the potential consequence of deflation?
Stimulated business
Increase in consumer spending
More unemployment
Increase in business profits
Answer explanation
Deflation can lead to more unemployment as businesses may cut costs and reduce workforce to cope with falling prices and demand.
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