Exam 28: Money and the Banking System

When a banker accepts a deposit of $1,000 in cash and puts $200 aside as required reserves and then makes a loan of $800 to a new borrower, this set of transactions

The Ponderosa Bank receives a new deposit of $2,500.The reserves requirement is 20 percent.How much can this bank loan out as a result of this deposit?

In what sense can it be said that money is a social invention? How does a barter system of trade compare to the invention of money?

One difference between the assets included in M₁ and those added to calculate M₂ is that items in M₁ are

Fiat money is money

Bankers' business decisions effect the money supply because bankers

The balance sheet of a solvent bank will show

Which of the following is a reason that banks are so heavily regulated?

The major contribution of goldsmiths to the development of modern banking was

A system that guarantees that depositors will not lose money even if the bank goes bankrupt is known as

Banks are required to keep a minimum level of reserves on hand.The intent of this regulation is

Banks will keep excess reserves when

Most checkable deposits are insured up to $250,000 by

The money multiplier yielded by the deposit-creation formula assumes that

Most bank deposits in the United States are insured by the Federal Deposit Insurance Corporation (FDIC).

Unlike recent events in England, the United States has no recent history of bank failures.

An asset that can be converted quickly into cash at a low transaction cost is known as

Many economists believe that the difference between savings accounts and checking accounts is disappearing.

The maximum increase in the money supply possible from a deposit of $D into the banking system where R is the reserve requirement is

As of December 31, 2010, the assets listed on the balance sheet of Bank A were $1.5 million in cash reserves and $6 million in outstanding loans to its customers.Its liabilities totaled $6.5 million in checking deposits.What was the bank's net worth on that date?