Exam 28: Money and the Banking System

During a recession, profit-oriented banks would be prone to reduce the money supply by increasing their excess reserves and declining to lend to less creditworthy applicants.

Under fractional banking, when a bank lends to a customer

A credit card is a form of money.

Banks cannot influence the money supply if they hold all deposits in reserve.

If bankers decide to keep a lower fraction of deposits on reserve, the money supply will

Commodity money is

When excess reserves increase, the deposit multiplier is

If the reserve requirement is 20 percent and a new deposit of $10,000 in cash is made by a customer to their checking account, by how much are excess reserves increased?

If checkable deposits in the first National Bank total $550 million and the required reserve ratio is 10 percent, then required reserves for first National Bank is

The oversimplified money multiplier formula, when the required reserve ratio is m, is

The "efficiency of the payments mechanism" refers to

Banking under a system of fractional reserves is a(n)

Bank regulation exists because public authorities are convinced that

The Federal Deposit Insurance Corporation insures

One inconvenience of commodity money is the need for

During the 2007-2009 financial crisis, the U.S.government decided that Lehman Brothers was not too big to fail and that AIG was too big to fail.

Which of the following is not included in the M₁ definition of the money supply?

Systemic risks inhere mainly in the largest financial institutions.

Which of the following was a result of the Dodd-Frank Act?

Which of the following would be a liability to a bank?