Question 1

Deposits are examples of a bank's

Accepted Answer

A)  assets. 
B)  liabilities. 
C)  net worth. 
D)  balance sheet. 
A)  assets. 
B)  liabilities. 
C)  net worth. 
D)  balance sheet.

Question 2

Money is

Accepted Answer

A)  anything that is regularly used and generally accepted in economic transactions or exchanges. 
B)  necessary to conduct economic transactions. 
C)  facilitates specialization in production. 
D)  anything the government declares to have value. 
A)  anything that is regularly used and generally accepted in economic transactions or exchanges. 
B)  necessary to conduct economic transactions. 
C)  facilitates specialization in production. 
D)  anything the government declares to have value.

Question 3

Suppose Kaylee withdraws $4,000 from her bank. If the reserve ratio is 25 percent, then this will lead to a decrease in M1 of

Accepted Answer

A)  $1,000. 
B)  $4,000. 
C)  $8,000. 
D)  $12,000. 
A)  $1,000. 
B)  $4,000. 
C)  $8,000. 
D)  $12,000.

Question 4

Which of the following is NOT included in M1 or M2?

Accepted Answer

A)  checking account balances 
B)  currency in circulation outside of commercial banks 
C)  traveler's checks 
D)  credit card balances 
A)  checking account balances 
B)  currency in circulation outside of commercial banks 
C)  traveler's checks 
D)  credit card balances

Question 5

A bank's required reserves are the fraction of deposits they are required by law to hold as reserves.

Accepted Answer

A) True 
 B)False

Question 6

About 46 percent of M1 is composed of

Accepted Answer

A)  demand deposits. 
B)  savings deposits. 
C)  money market mutual funds. 
D)  currency held by the public. 
A)  demand deposits. 
B)  savings deposits. 
C)  money market mutual funds. 
D)  currency held by the public.

Question 7

Checking account balances are included in

Accepted Answer

A)  M1 only. 
B)  M2 only. 
C)  both M1 and M2. 
D)  neither M1 nor M2. 
A)  M1 only. 
B)  M2 only. 
C)  both M1 and M2. 
D)  neither M1 nor M2.

Question 8

Using the formula for an infinite sum, if "r" designates the reserve ratio, the 1 / reserve ratio would equal

Accepted Answer

A)  (1 - r). 
B)  1 / (1 - r). 
C)  1 / [1 - (1 - r)]. 
D)  r / (1 - r). 
A)  (1 - r). 
B)  1 / (1 - r). 
C)  1 / [1 - (1 - r)]. 
D)  r / (1 - r).

Question 9

Monetary policy refers to the actions taken by the Treasury Department to set the level of the money supply.

Accepted Answer

A) True 
 B)False

Question 10

The largest single component of M2 is

Accepted Answer

A)  demand deposits. 
B)  savings deposits. 
C)  money market mutual funds. 
D)  currency held by the public. 
A)  demand deposits. 
B)  savings deposits. 
C)  money market mutual funds. 
D)  currency held by the public.

Deposits are examples of a bank's

Money is

Suppose Kaylee withdraws $4,000 from her bank. If the reserve ratio is 25 percent, then this will lead to a decrease in M1 of

Which of the following is NOT included in M1 or M2?

A bank's required reserves are the fraction of deposits they are required by law to hold as reserves.

About 46 percent of M1 is composed of

Checking account balances are included in

Using the formula for an infinite sum, if "r" designates the reserve ratio, the 1 / reserve ratio would equal

Monetary policy refers to the actions taken by the Treasury Department to set the level of the money supply.

The largest single component of M2 is

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nation's Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

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Exam 13: Money and the Banking System

Deposits are examples of a bank's

Money is

Suppose Kaylee withdraws $4,000 from her bank. If the reserve ratio is 25 percent, then this will lead to a decrease in M1 of

Which of the following is NOT included in M1 or M2?

A bank's required reserves are the fraction of deposits they are required by law to hold as reserves.

About 46 percent of M1 is composed of

Checking account balances are included in

Using the formula for an infinite sum, if "r" designates the reserve ratio, the 1 / reserve ratio would equal

Monetary policy refers to the actions taken by the Treasury Department to set the level of the money supply.

The largest single component of M2 is

Introduction: What Is Economics?

The Key Principles of Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nation's Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow?

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters