Exam 12: Money Banking and the Financial System

A bank's assets are $400 million and its liabilities are $300 million, which means that the bank's net worth (bank capital) is ____________________. If the bank's assets rise by 8% at the same time that its liabilities rise by 5%, the bank's new net worth will then be _______________.

Bank capital equals assets minus liabilities.

Bank A has checkable deposits of $10 million and total reserves of $1 million. The required reserve ratio is 9 percent. The bank has excess reserves of

To a bank, a checkable deposit is classified as

Because money __________________, people are _________________ likely to specialize in their work in a money economy.

Compared to barter, money __________ transaction costs, making transactions __________ time-consuming.

The first bankers were

A unit of account is

Consider the following data: savings deposits = $900 billion, currency (held outside banks) = $453 billion, retail money market mutual funds = $1,300 billion, checkable deposits = $525 billion, traveler's checks = $5 billion, small-denomination time deposits = $400 billion. M1 equals __________ billion and M2 equals __________ billion.

To a bank, a loan the bank has made to its borrowers is classified as

In which situation are transaction costs most likely to be the lowest?

Exhibit 12-1 ​ ​ -Refer to Exhibit 12-1. If Bank ABC's assets rise by 5 percent and its liabilities rise by 3 percent, by what percentage would its bank capital change compared to its original bank capital (i.e. compared to the value originally in blank (A))?

In a barter economy,

Which of the following illustrates a barter transaction?

Bank A has $75,000 in total reserves, and zero excess reserves. The required reserve ratio is 12 percent. Bank A has checkable deposits of

Which of the following is a correct listing of money's functions?

List and describe the three functions of money.

If checkable deposits in Bank A total $620 million and the required reserve ratio is 9 percent, then required reserves at Bank A equal

Which of the following statements is true?

In general, it is reasonable to assume that the average person's standard of living is ____________ in a ____________ economy than in a ____________ economy.