FINMA 2100 1st TERM EXAM – PART 1 (Identification)
1. This often comes during war time.
INVOLUNTARY PAPER STANDARD (9)
2. This standard is more of a theory since it has not yet been put into use.
INVOLUNTARY PAPER STANDARD (9)
3. People are free to convert their bullion into coins.
MONOMETALLIC COMMODITY STANDARD – GOLD COIN STANDARD (1)
4. Two different metals at a fixed legal ratio of weights and fineness are used as
monetary unit. BIMETALLIC COMMODITY STANDARD (7)
5. It promotes the use of an inconvertible and irredeemable paper money that is issued
against no gold or silver reserves. MANAGED CURRENCY STANDARD (10)
6. There is a possibility of an excessive exportation of gold. MONOMETALLIC
COMMODITY STANDARD – GOLD EXCHANGE STANDARD (3)
7. It doesn’t have a check and balance of gold reserves. MONOMETALLIC
COMMODITY STANDARD – GOLD EXCHANGE STANDARD (3)
8. The government fixed the price of gold. MONOMETALLIC COMMODITY
STANDARD – GOLD BULLION STANDARD (2)
9. The government allowed the people to hoard gold. MONOMETALLIC COMMODITY
STANDARD – GOLD EXCHANGE STANDARD (3)
10. This is the standard currently used in the Philippines. MANAGED CURRENCY
SYSTEM (10)
FINMA 2100 1st TERM EXAM – PART 2 (Identification)
1. The money issued by a financially embarrassed government is called Fiat Money.
2. When the value of money rises, the buying power of money increases.
3. It may cause a depression in employment and consequently a loss in purchasing
power. Deflation.
4. During the Japanese time, the monetary system of the Philippines was Involuntary
Paper Standard.
5. According to him, the value of money is measured by what a unit of money will buy
in terms of a representative of economic goods. Lloyd B. Thomas.
FINMA 2100 1st TERM EXAM – PART 3 (True or False)
1. A. Anything that reduces the propensity to hold checking accounts increases the
velocity of money. B. Anything that reduces the propensity to hold checking
accounts decreases the velocity of money.
Statement A is TRUE while Statement B is FALSE.
2. A. If the money supply increases 10%, GDP expenditures must decrease unless
velocity declines 10% or more, negating the effect of the increase in the average
money supply in existence in a given year. B. If the money supply increases 10% or
more, GDP expenditures must also increase unless velocity declines 10% or more,
negating the effect of the increase in the average money supply in existence in a
given year. Statement A is TRUE while Statement B is FALSE.
3. A. Fiat money is a kind of paper money issued by a private sector edict or decree
that is most often issued during a war whereby an occupying country circulates a
kind of paper money whose money value has no relationship at all with its intrinsic
value. B. Legal tender money is the kind of money that circulates because of its legal
tender power. Statement A is FALSE while Statement B is TRUE.
4. A. Foreign demand for Philippine exports will increase because foreign made
products will become more expensive. B. Foreign demand for Philippine exports will
decrease because foreign made products will become less expensive.
Both Statements are TRUE.
5. A. After the arrival of Spaniards in 1571, trade was conducted by using irregular
shaped coins, hammered in Mexico. B. Spaniards regime started in 1571.
Both Statements are FALSE.
6. A. Lower interest rates would boost consumer expenditures on big-ticket items
typically bought on credit, such as cars, furniture and major appliances. B. An
increase in consumer confidence owing perhaps to increased job stability or reduced
consumer indebtedness would recess consumption.
Statement A is TRUE while Statement B is FALSE.
7. A. Tax policy toward business in particular and investment spending in general,
influences investment spending. B. Boosting in investment expenditures associated
with any given interest rate and improvement of business confidence.
Statement A is FALSE while Statement B is TRUE.
8. A. When the government sells treasury bills or treasury notes, the opportunity cost of
holding bank accounts increases because these securities are highly attractive to
millions of individuals. B. When the government sells treasury bills or treasury notes,
the opportunity cost of holding bank accounts decreases because these securities
are less attractive to millions of individuals.
Statement A is TRUE while Statement B is FALSE.
9. A. A monometallic standard is divided into gold and silver standard. B. A bimetallic
standard is divided into gold and silver standard.
Statement A is FALSE while Statement B is TRUE.
10. A. The excessive desire for money profits sometimes includes businessman and
manufacturers to sacrifice the quality of their products. B. Sometimes management
and labor dispute arise out of claims to a large sum of money incomes.
Both Statement are TRUE.
