Exam 13: Money and the Banking System

Which of the following serves as the central bank for the United States?

Recall the Application about the Brazilian city of Silva Jardim that has issued its own local currency to answer the following question(s). In order to entice local residents to spend their money on stores in town, the small city of Silva Jardim in Brazil, hatched a plan for its own currency. The currency is called the capivari and features a picture of a local rodent on the bills. The capivaris are issued by a local bank, which holds one unit of official Brazilian currency for each capivari it issued. Local merchants, however, give discounts for paying in capivaris so that local residents are therefore encouraged to make local purchases. -According to this Application, the small city of Silva Jardim in Brazil has issued its own currency called the capivari. If this currency had nothing backing its value and was simply created by decree of the issuing city government, the city-issued money would be considered

Isabel receives a check for $7,000 from Kermit and deposits it in her bank. Suppose that the reserve ratio is 10 percent. As a result of this transaction the money supply will

Given the following information about Metropolis Bank: Bank Deposits $50,000 Loans 17,500 Required Reserves 30,000 Excess Reserves 2,500 The required reserve ratio must be

Suppose that while vacationing in Switzerland, you won 9,375 Swiss francs, which is the equivalent of $8,000. When you return to the United States, you deposit the $8,000 into your checking account. If the required reserve ratio is 15 percent, this would increase your bank's

What are the three properties of money?

Mr. Garrison has recently obtained a bank card from South Park National Bank. Excited about the concept of using a little plastic card to get money from a machine, he quickly runs down to the nearest Automatic Teller Machine and withdraws $500. This action has

Loans are examples of a bank's

The money multiplier will be smaller when

What is a gold standard?

When one individual writes a check to another individual the money supply will not be changed.

The money multiplier is equal to

Currency is included in

The supply of money in the U.S. economy is determined primarily by

The formula for an infinite sum is 1 / (1 - b), where b = (1 - reserve ratio).

Which of the following is a bank liability?

Suppose Jennifer has $42,000 in currency which she deposits in her bank. If the reserve ratio is 50 percent, this will lead to a maximum increase of ________ in M1 throughout all banks.

Every country in the world has an independent central bank.

The president of the ________ Federal Reserve Bank is always a member of the FOMC.

The smallest single component of M1 is