In prisoner-of-war camps, cigarettes were used as a medium of exchange, unit of
ID: 1108158 • Letter: I
Question
In prisoner-of-war camps, cigarettes were used as a medium of exchange, unit of account, and store of value. In this situation, cigarettes are best classified as
Question 3 options:
A) legal tender
B) fiat money
C) near money
D) commodity money
Suppose you withdraw $1,000 in cash from your savings account. How does this action affect the M1 and M2 money supplies?
Question 5 options:
A) M1 and M2 are both unchanged.
B) M1 rises by $1,000 and M2 falls by $1,000.
C) M1 rises by $1,000 and M2 is unchanged.
D) M1 is unchanged and M2 falls by $1,000
The Federal Reserve System was created
Question 6 options:
A) when the Constitution was written.
B) in 1913 during the Wilson administration.
C) during the Great Depression to insure bank deposits.
D) with the Monetary Control Act of 1980
Who was appointed as the Chair of the Board of Governors by President Reagan and was reappointed by Presidents George H.W. Bush, Clinton, and George W. Bush?
Question 7 options:
A) Alan Greenspan
B) Robert Reich
C) Milton Friedman
D) John Maynard Keynes
Explanation / Answer
First question is answered below
Correct option: (d) commodity money
Reason: As seen, cigarettes being an individual commodity served all purposes of money to buy and sell goods, thereby making it a perfect fit for commodity money.