Exam 12: Money and Banking

Suppose a bank has demand deposits of $2,500, excess reserves of $125, and a reserve requirement of 25 percent. What is the loss in the money expansion process of the whole banking system if the bank decides to lend out only $100?

A composite currency whose value is the average of the values of the U.S. dollar, the Japanese yen, the euro, and the British pound is known as a:

Which of the following can be categorized as a composite currency?

Which of the following is true of the FDIC?

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

The table given below records the amount of new deposits, the value of required reserves, and total amount loaned out by Banks 1, 2, and 3.? -Refer to Table 12.3. What is the reserve requirement?

The use of money as a medium of exchange requires a double coincidence of want.

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

Suppose Bank X is holding total cash reserves of $32,000 on deposits of $90,000. If the reserve requirement is 15 percent, then the excess reserves held by this bank is:

The Depository Institutions Deregulation and Monetary Control Act passed by the Congress in 1980 led to:

Which of the following would be counted as part of M1?

In the 1980s, some states in the United States had significantly more bank failures than other states. What industries did the former states depend on heavily?

Sales contracts between developed countries are usually written (invoiced) in the national currency of the exporter.

If a bank has deposits worth $800,000, total reserves worth $800,000, and the reserve ratio of 0.20, what is the value of excess reserves?

If the entire banking system has total deposits of $4 billion and a reserve requirement of 5 percent, then the maximum possible amount of loans that the banking system can make equals $2 million.

Assume that the reserve requirement is 10 percent. If a bank has total deposits of $80 million, then the required reserves must equal:

The table given below records the amount of new deposits, the value of required reserves, and total amount loaned out by Banks 1, 2, and 3.? -Refer to Table 12.3. What is the total increase in the money supply created in the banking system as a result of the initial deposit of $10,000 in Bank 1?

In high-inflation countries, workers prefer to spend their income faster compared to low-inflation countries.

The primary international reserve asset in most countries is:

For a depository institution, reserves are: