Exam 8: Money, the Price Level, and Inflation

Suppose a bank has $1,500,000 in deposits and the desired reserve ratio is 12 percent. If the bank is currently holding $200,000 in reserves, the bank's unplanned reserves are equal to

When bank deposits increase from $1 million to $2 million, banks' required reserves increase from $100,000 to $200,000. The required reserve ratio is

The sale of $1 billion of securities to a bank or some other business by the Fed is an example of

Which of the following equations represents the equation of exchange?

Nominal GDP (i.e. PY) is $7.5 trillion. The quantity of money is $3 trillion. The velocity of circulation is

Credit cards are

-The above table has the demand for money schedule. a) If the Fed sets the quantity of money equal to $1.0 trillion, what is the equilibrium interest rate? b) If the Fed wants the interest rate to be 4 percent, what must it do?

When you buy a hamburger for lunch, you are using money as a

-In the figure above, an increase in the monetary base would create a change such as a

Unplanned reserves are equal to

The functions of money are

A credit union is

What is a "currency drain?" How and why does it affect the money multiplier?

Which of the following is an example of money functioning as a medium of exchange?

The opportunity cost of holding money refers to

-According to the table above, the value of M1 is ________ and the value of M2 is ________.

What is the structure of the Federal Reserve Bank System?

The balance owed on credit cards in the United States in 2014 was $880 billion. When consumers pay off this balance in full,

In Zealand, banks' desired reserve ratio is 20 percent and there is no currency drain. The money multiplier equals

The velocity of circulation is