Exam 14: Money and the Banking System

Suppose the required reserve ratio is 25 percent and the public decides to deposit $10 million cash into checking accounts throughout the banking system. This will allow the banking system to create a maximum amount of additional new deposits equal to

The broader definitions of the money supply (M₂ and M₃) emphasize the role of money as a

Commercial banks in the U.S. had combined assets in 2006 of approximately

The U.S. Treasury is the major issuer of paper currency in the United States.

To find the maximum amount of money that the banking system can generate with each dollar of excess reserves, we use the money multiplier.

The new dollar coin issued in the United States in 2000 bears the image of

The largest component of the M₁ money supply is

A bank's balance sheet shows "checking deposits" as

The banking system's money multiplier equals

If the required reserve ratio is 20 percent, and Bill Jones deposits $500 into his checking account, his bank's

The M₁ money supply emphasizes money as a temporary store of value.

Money serves as a unit of account when people state the price of goods and services in terms of money.

Which of the following is not considered money?

When the Federal Deposit Insurance Corporation deals with failed banks, it always closes them down right away and pays off the depositors.

The U.S. money supply includes all of the following except

The largest nationwide processor of "transit checks" that move between different banks is the

Credit cards perform the same functions as currency so they are considered money.

The Federal Reserve does not charge any fees for the check processing services it offers to banks

Economists widely consider credit cards to be money because they are a convenient form of financing transactions.

Time deposits are often called