Exam 14: The Money Supply Process

Assuming initially that rr = 10%,c = 40%,and e = 0,an decrease in c to 30% causes the M1 money multiplier to ________,everything else held constant.

Everything else held constant,an increase in the currency ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply.

Reserves are equal to the sum of

In the simple deposit expansion model,an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the Fed

An increase in Treasury deposits at the Fed causes

Assuming initially that rr = 10%,c = 40%,and e = 0,an increase in rr to 15% causes the M1 money multiplier to ________,everything else held constant.

Individuals that lend funds to a bank by opening a checking account are called

If a bank has excess reserves of $5,000 and demand deposit liabilities of $80,000,and if the reserve requirement is 20 percent,then the bank has actual reserves of

Suppose that from a new checkable deposit,First National Bank holds eight million dollars on deposit with the Federal Reserve,nine million dollars in excess reserves,and faces a required reserve ratio of ten percent.Given this information,we can say First National Bank has ________ million dollars in vault cash.

If reserves in the banking system increase by $100,then checkable deposits will increase by $500 in the simple model of deposit creation when the required reserve ratio is

The steepest increase in the currency ratio since 1892 occurred during

Suppose that from a new checkable deposit,First National Bank holds eight million dollars on deposit with the Federal Reserve,one million dollars in required reserves,and faces a required reserve ratio of ten percent.Given this information,we can say First National Bank has ________ million dollars in vault cash.

If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $1000 billion,and excess reserves total $1 billion,then the excess reserves-checkable deposit ratio is

A ________ in market interest rates relative to the discount rate will cause discount borrowing to ________.

Assuming initially that rr = 10%,c = 40%,and e = 0,an increase in c to 50% causes the M1 money multiplier to ________,everything else held constant.

Excess reserves are equal to

When the Fed extends a $100 discount loan to the First National Bank,reserves in the banking system

If the required reserve ratio is 25 percent,the simple deposit multiplier is

An increase in the monetary base that goes into currency is ________,while an increase that goes into deposits is ________.

Everything else held constant,an increase in wealth will cause the holdings of checkable deposits to the holdings of currency to ________ and the currency ratio will ________.