Exam 5: Policy Makers and the Money Supply

During the 2007-2009 financial crisis, many major financial institutions and business corporations were on the verge of collapse or failure; however, some of the very largest corporations and financial institutions were deemed as being ________ because their failure would cause cascading negative repercussions throughout the U.S. and many foreign economies.

When the United States Treasury makes a payment to an individual, it usually takes the form of a

High inflation has been a significant problem in the United States during the past decade.

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

Automatic stabilizers include trade deficits, budget deficits, and floating exchange rates.

Progressive income tax is an automatic stabilizers.

The U.S. government may influence monetary and credit conditions indirectly through taxation and expenditure programs.

A government raises funds to pay for its activities in two ways: levies taxes or prints money for its own use.

If a check is written for the full amount of a derivative deposit created by a bank loan and then is sent to a bank in another city for deposit

Almost all Treasury disbursements are made by

A depository institution's vault cash and funds held at its regional Federal Reserve Bank.

The U.S. Treasury is responsible for refinancing the outstanding debt of the government.

The U.S. Treasury has little power to influence money markets.

The president is one of the four policy making groups.

Aggregate demand refers to total spending in the economy.

The monetary base is the banking system reserves, plus currency held by the public.

"Crowding out" caused by deficit financing can result in tighter credit conditions and higher interest rates.

In September, 2008 ____________ was acquired by Bank of America and _____________ declared bankruptcy when no viable financial alternatives surfaced.

The branch of government primarily responsible for the formulation of fiscal policy is the U.S. Senate.

The velocity of money measures the rate at which wire transfers can be transmitted to overseas banks.