Exam 13: Money and Banks

If banks are willing to make loans and consumers and businesses are willing to borrow money,this constrains the money supply.

Suppose a bank has $200,000 in deposits,a required reserve ratio of 10 percent,and bank reserves of $45,000.Then this bank can make new loans in the amount of

When money serves as a mechanism for transforming current income into future purchases,it is functioning as a

Ceteris paribus,the money supply becomes smaller when

If total reserves for a bank are $12,000,excess reserves are $2,000,and demand deposits are $100,000,the money multiplier must be

When cash or coins are deposited in a transactions account at a bank,the size of M1 changes.

All checking accounts are transactions accounts.

Table 13.1 XYZ Bank Balance Sheet Refer to Table 13.1.If XYZ Bank has a required reserve ratio of 10 percent and loan proceeds are not redeposited,it can legally increase its loans by

Required reserves represent

How does the banking system create money?

Which of the following appears in M2 but not in M1?

Which of the following could cause the money supply to decrease?

Which of the following is a bank liability?

First National Bank has zero excess reserves.Ceteris paribus,if the required reserve ratio increases,which of the following will happen immediately?

Currency in circulation is included in

Farmer Brown wants some bacon for breakfast.He gets the bacon from Farmer Hernandez by giving her a dozen eggs.This type of transaction is referred to as

Traveler's checks are included in which of the following?

The various money supply measures (M1 and M2)are used to distinguish the

Savings accounts are included in

One of the essential functions a bank performs is that of