Table 12.2 $\begin{array}{c} \text { Balance Sheet }\\ \quad\quad\quad\text { Assets } \quad\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }\\ \begin{array}{|c|c|c|c|} \hline\text { Cash } & \$ 5,000 & \begin{array}{c} \text { Demand } \\ \text { Deposits } \end{array} & \$ 20,000 \\ \hline \text { Loans } & 15,000 & & \\ \hline \text { Total Assets } & \$ 20,000 & \text { Total Liabilities } & \$ 20,000 \\ \hline \end{array}\end{array}$ -Refer to Table 12.2. If the reserve requirement is 12 percent and the bank receives a new deposit of $10,000, then required reserves will increase by _____.

A) $3,600 B) $2,400 C) $2,600 D) $2,800 E) $1,200 A) $3,600 B) $2,400 C) $2,600 D) $2,800 E) $1,200

Table 12.2 $\begin{array}{c} \text { Balance Sheet }\\ \quad\quad\quad\text { Assets } \quad\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }\\ \begin{array}{|c|c|c|c|} \hline\text { Cash } & \$ 5,000 & \begin{array}{c} \text { Demand } \\ \text { Deposits } \end{array} & \$ 20,000 \\ \hline \text { Loans } & 15,000 & & \\ \hline \text { Total Assets } & \$ 20,000 & \text { Total Liabilities } & \$ 20,000 \\ \hline \end{array}\end{array}$ -Refer to Table 12.2. With a reserve requirement of 20 percent, the bank has excess reserves of _____.

A) $5,000 B) $3,000 C) $2,000 D) $1,000 E) $2,500 A) $5,000 B) $3,000 C) $2,000 D) $1,000 E) $2,500

The table given below shows the components of money supply in an economy. Table 12.1 $\begin{array}{|l|c|} \hline {\text { Money Component }} & \text { Amount (in millions) } \\ \hline \text { Currency } & \$ 550 \\ \text { Travelers' Checks } & \$ 20 \\ \text { Savings Deposits } & \$ 180 \\ \text { NOW Accounts } & \$ 185 \\ \text { Small-Denomination Time Deposits } & \$ 620 \\ \text { Retail Money Market Mutual Funds } & \$ 605 \\ \text { ATS Accounts } & \$ 180 \\ \text { Demand Deposits } & \$ 210 \\ \hline \end{array}$ -Refer to Table 12.1 and calculate the value of M2.

A) $1,145 B) $1,325 C) $1,750 D) $2,550 E) $2,815 A) $1,145 B) $1,325 C) $1,750 D) $2,550 E) $2,815

Exam 12: Money and Banking

Table 12.2 Balance Sheet Assets Liabilities Cash \ 5,000 Demand Deposits \ 20,000 Loans 15,000 Total Assets \ 20,000 Total Liabilities \ 20,000 -Refer to Table 12.2. If the reserve requirement is 12 percent and the bank receives a new deposit of $10,000, then required reserves will increase by _____.

(Multiple Choice)

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Question 41

If Brazil experienced a period of rapid and unexpected inflation, causing Brazilians to lose confidence in the local currency (real) as a store of value, which of the following would be least likely to occur?

(Multiple Choice)

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Question 42

The concept of double coincidence of wants refers to the fact that:

(Multiple Choice)

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Question 43

Total reserve holdings over and above required reserves constitute the minimum amount of loans a depository institution can make.

(True/False)

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Question 44

Table 12.2 Balance Sheet Assets Liabilities Cash \ 5,000 Demand Deposits \ 20,000 Loans 15,000 Total Assets \ 20,000 Total Liabilities \ 20,000 -Refer to Table 12.2. With a reserve requirement of 20 percent, the bank has excess reserves of _____.

(Multiple Choice)

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Question 45

The main source of earning profits for banks is:

(Multiple Choice)

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Question 46

Using money as a medium of exchange:

(Multiple Choice)

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Question 47

Calculate the dollar price of a German automobile worth 40,000 euros, if the dollar per euro exchange rate is 1.5.

(Multiple Choice)

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Question 48

If a bank's required reserves equal $270,000, no excess reserves are held, and the reserve requirement is equal to 18 percent, what is the value of the bank's total deposits?

(Multiple Choice)

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Question 49

Which of the following is true of the FDIC?

(Multiple Choice)

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Question 50

Which of the following constitutes a currency drain from the banking system?

(Multiple Choice)

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Question 51

The table given below shows the components of money supply in an economy. Table 12.1 Money Component Amount (in millions) Currency \ 550 Travelers' Checks \ 20 Savings Deposits \ 180 NOW Accounts \ 185 Small-Denomination Time Deposits \ 620 Retail Money Market Mutual Funds \ 605 ATS Accounts \ 180 Demand Deposits \ 210 -Refer to Table 12.1 and calculate the value of M2.

(Multiple Choice)

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Question 52

The U.S. dollar is the most important reserve currency in the world.

(True/False)

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Question 53

Under Gresham's law, the term bad money refers to:

(Multiple Choice)

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Question 54

The euro is a composite currency; its value is an average of the changing values of several national currencies.

(True/False)

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Question 55

The use of foreign money instead of domestic money when the domestic economy has a high rate of inflation is called _____.

(Multiple Choice)

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Question 56

Which of the following assets would be considered least liquid?

(Multiple Choice)

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Question 57

An asset that can easily be exchanged for goods and services is referred to as:

(Multiple Choice)

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Question 58

Which of the following is true of a certificate of deposit?

(Multiple Choice)

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Question 59

Which of the following is true of the European Currency Unit?

(Multiple Choice)

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Question 60

If Brazil experienced a period of rapid and unexpected inflation, causing Brazilians to lose confidence in the local currency (real) as a store of value, which of the following would be least likely to occur?

The concept of double coincidence of wants refers to the fact that:

Total reserve holdings over and above required reserves constitute the minimum amount of loans a depository institution can make.

Table 12.2 Balance Sheet Assets Liabilities Cash \ 5,000 Demand Deposits \ 20,000 Loans 15,000 Total Assets \ 20,000 Total Liabilities \ 20,000 -Refer to Table 12.2. With a reserve requirement of 20 percent, the bank has excess reserves of _____.

The main source of earning profits for banks is:

Using money as a medium of exchange:

Calculate the dollar price of a German automobile worth 40,000 euros, if the dollar per euro exchange rate is 1.5.

If a bank's required reserves equal $270,000, no excess reserves are held, and the reserve requirement is equal to 18 percent, what is the value of the bank's total deposits?

Which of the following is true of the FDIC?

Which of the following constitutes a currency drain from the banking system?

The U.S. dollar is the most important reserve currency in the world.

Under Gresham's law, the term bad money refers to:

The euro is a composite currency; its value is an average of the changing values of several national currencies.

The use of foreign money instead of domestic money when the domestic economy has a high rate of inflation is called _____.

Which of the following assets would be considered least liquid?

An asset that can easily be exchanged for goods and services is referred to as:

Which of the following is true of a certificate of deposit?

Which of the following is true of the European Currency Unit?

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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