Exam 13: Amoney and the Banking System

Suppose the Fed bought $150 million of U.S.securities from the public.The reserve requirement is 20 percent,and there are no initial excess reserves.A few weeks later,if the public's holdings of currency are constant and the banks have loaned all excess reserves,the money supply will increase by

Which of the following guarantees the deposits in almost all banks up to a $250,000 limit per account?

Explain how the Fed would use its four tools to decrease and to increase the money supply.

Which of the following would appear on the liability side of the balance sheet of a commercial bank?

The large increase in the excess reserves held by the commercial banking system during the second half of 2008,

If a number of people suddenly deposit into their checking accounts a great deal of cash previously kept in their pockets or at home,other things constant,their actions will

If people decide to hold less money as currency and more as checking deposits,this will most likely cause a(n)

The interest rate in the federal funds market

If the public decides to hold more currency and fewer deposits in banks,bank reserves

An individual bank can lend out at most its

Which of the following is not a depository institution?

The total expansion in the money supply can be less than is predicted by the deposit expansion multiplier if

During the financial crisis of 2008-2010,the Fed

Suppose the Fed purchases $100 million of U.S.securities from the public.If the reserve requirement is 20 percent,the currency holdings of the public are unchanged,and banks have zero excess reserves both before and after the transaction,the total impact on the money supply will be a

A reserve requirement of 5 percent implies a potential money deposit multiplier of

In order for barter to occur,traders must have a

Compared to a barter economy,using money increases efficiency by reducing

The Fed is institutionally independent.A major advantage of this is that monetary policy

The federal funds rate is the interest rate paid when

One advantage of a money system compared to a barter system is that