Exam 13: Money and the Banking System

In practice, money supply and short-term interest rates are determined by the

Other things constant, if the Fed decreased the discount rate,

Ordinary commercial banks can expand the supply of money by

Under current policy, the Fed ties the discount rate to the

Fiat money is money

Which of the following lists two things that both increase the money supply?

If a customer deposits $1,000 cash into her checking account, the bank's

If you have a checking account at a local bank, your bank account there is

Which of the following items are counted in M2?

The Fed is institutionally independent. A major advantage of this is that monetary policy

When individuals shift funds from money market mutual funds to no-load stock and bond mutual funds,

Prior to 2008, the primary tool used by the Fed to control the money supply was

Open-market purchases by the Fed make the money supply

When using the money supply figures to measure the direction of monetary policy during the last several decades, it is better to look at changes in the M2 money supply rather than M1 because

Are outstanding credit card balances counted as part of the money supply?

Which of the following indicates the primary mechanism by which the money supply expands?

During the financial crisis of 2008, Fed policy

Commercial banks can borrow reserves directly from the Fed at the

Assume the reserve requirement is 10 percent. First National Bank has vault cash and deposits with the Fed of $30 million, loans and securities of $60 million, and checking deposits of $300 million. First National is in a position to make

Other things constant, which of the following would cause the M2 money supply to decline?