Exam 5: Policy Makers and the Money Supply

Unemployment is an automatic stabilizers.

Budgetary deficits always have the effect of

Banking system reserves plus currency held by the nonbank public is referred to as the

The budget-making process rests with the

Congress is one of the four policy making groups.

During the 2007-2009 financial crisis, some of the very largest financial institutions were deemed as being "too big to fail" because their failure would cause cascading negative repercussions throughout the U.S. and many foreign economies. As a result, the Federal Reserve

The deposit of a check drawn on the Fed is a derivative deposit because it adds new reserves to the bank where deposited and to the banking system.

The relationship between the money supply and demand affects the level of prices and economic activity in our market economy.

The government body primarily responsible for monetary policy is Congress.

Moderate economic growth is one of the three general goals of U.S. economic policy actions.

The United States economy has little influence on the economies of other nations.

Which of the following statements is most correct?

Automatic stabilizers include all of the following except

Commercial banks are one of the four policy making groups.

Tax receipts tend to increase during economic downturns.

Assume that a bank must keep reserves of 20% against deposits. The bank receives a primary deposit of $50,000. What amount of excess reserves can the bank safely lend?

Which of the following statements is most correct?

Fannie Mae was on the verge of financial insolvency and possible collapse in mid-2008.

Examples of automatic stabilizers are (choose one)

Minimum amount of reserves that a depository institution must hold against its deposit liabilities.