1) Which of the following is the best example or description of fiat money? A

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1) Which of the following is the best example or description of fiat money?

A. Coins made of gold and silver

B. Paper money that is not a medium of exchange

C. Legal tender that has no intrinsic value

D. Checking accounts and debit cards

E. Credit cards

2. During periods of hyperinflation, money fails to function as:

A. a medium of exchange.

B. a unit of account.

C. a store of value.

D. fiat money.

E. commodity money.

3. Which of the following is not counted as part of M1?

A. Coins

B. Federal Reserve notes, or "paper money"

C. Savings deposits

D. Checkable deposits

E. Traveler’s checks

4. Suppose you transfer $1,000 from your checking account to your savings account. How does this action affect the size of M1 and M2?

A. M1 and M2 are both unchanged.

B. M1 falls by $1,000, and M2 rises by $1,000.

C. M1 is unchanged, and M2 rises by $1,000.

D. M1 falls by $1,000, and M2 is unchanged.

E. M1 falls by $1,000, and M2 rises by $2,000