Exam 29: The Monetary System

Economists argue that the move from barter to money increased trade and production. How is this possible?

Money is

Which of the following institutions is a central bank?

When prisoners use cigarettes or some other good as money, cigarettes become

If the reserve ratio is 4 percent, then $81,250 of new money can be generated by

The money supply increases when the Fed

An increase in the money supply might indicate that the Fed had

In Ugoland, the money supply is $8 million and reserves are $1 million. Assuming that people hold only deposits and no currency, and that banks hold no excess reserves, then the reserve requirement is

At any meeting of the Federal Open Market Committee, that committee's voting members consist of

Table 29-6. -Refer to Table 29-6. Assume there is a reserve requirement and the Bank of Pleasantville is exactly in compliance with that requirement. Assume the same is true for all other banks. Lastly, assume people hold only deposits and no currency. What is the money multiplier?

What does the "double coincidence of wants" refer to?

Fiat money

To increase the money supply, the Fed could

Which of the three functions of money are commonly met by each of the following assets in the U.S. economy? a.paper dollar b.precious metals c.collectibles such as baseball cards, stamps, and antiques

Which of the following is not correct?

Today, bank runs are

Which of the following is a store of value?

Members of the Board of Governors of the Federal Reserve System are appointed for life.

If a bank uses $500 of excess reserves to make a new loan when the reserve ratio is 8 percent, this action by itself initially makes the money supply

Explain how each of the following changes the money supply. a.the Fed buys bonds b.the Fed auctions credit c.the Fed raises the discount rate d.the Fed raises the reserve requirement