Exam 5: Policy Makers and the Money Supply

One factor that decreases the volume of bank reserves is a decrease in

The President of the United States formulates budgetary and fiscal policy, but Congress must enact legislation to implement these policies.

Primary groups of policy makers that are actively involved in achieving U.S. economic policy objectives include which of the following?

The four groups of policy makers that are actively involved in achieving the nation's economic policy objectives are the Federal Reserve System, the President, Congress, and the U.S. Treasury.

Nations that export more than they import will have a trade deficit.

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

In our financial system, the money multiplier

Assume that a banking system must keep reserves of 20% against deposits. The bank receives a primary deposit of $20,000. What would be the maximum amount of loan that could be made by the system?

Currently, the backing for Federal Reserve's notes is primarily in the form of

Traditionally, the federal government provides services that cannot be provided as efficiently by the private sector.

When a customer demands additional currency and cashes a check for $500, all of the following occur except

Since World War II, 12 individuals served as president of the United States.

Unemployment and welfare benefits are examples of transfer payments for which no current productive services are given in return.

The Federal Reserve System cannot directly control

Amount by which a depository institution's bank reserves are less than required reserves.

Although unemployment represents a loss of potential output, most economists agree that the real costs of unemployment to an economy are minimal.

The U.S. Treasury has primary responsibility for management of the federal debt.

The U.S. national debt is the total debt owed by the government and consists of debt held by the public.

Monetizing the deficit occurs when the Fed increases the money supply by purchasing government securities.

Required reserves are the minimum amount of total reserves that a depository institution must hold.