Exam 14: The Money Supply Process

If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $800 billion,and excess reserves total $0.8 billion,then the money supply is ________ billion.

Everything else held constant,a decrease in holdings of excess reserves will mean

Everything else held constant,a decrease in the excess reserves ratio causes the M1 money multiplier to ________ and the money supply to ________.

The amount of deposits that banks must hold in reserve is

Suppose that from a new checkable deposit,First National Bank holds eight million dollars on deposit with the Federal Reserve,one million dollars in required reserves,and faces a required reserve ratio of ten percent. Given this information,we can say First National Bank has ________ million dollars in vault cash.

High-powered money minus reserves equals

U.S. Treasury deposits at the Fed are ________ for the Fed but ________ for the Treasury. Thus an increase in U.S. Treasury deposits ________ the monetary base.

Everything else held constant,an increase in currency holdings will cause

Suppose your payroll check is directly deposited to your checking account. Everything else held constant,total reserves in the banking system ________ and the monetary base ________.

Everything else held constant,if the sum of the required reserve ratio and the excess reserve ratio is less than one,an increase in the currency-deposit ratio causes the M1 money multiplier to ________ and the money supply to ________.

When the Fed buys $100 worth of bonds from a primary dealer,reserves in the banking system

When the Federal Reserve extends a discount loan to a bank,the monetary base ________ and reserves ________.

If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $1,000 billion,and excess reserves total $1 billion,then the excess reserves-checkable deposit ratio is

Which of the following are NOT liabilities on the Fed's balance sheet?

If the required reserve ratio is one-third,currency in circulation is $300 billion,and checkable deposits are $900 billion,then the currency-deposit ratio is

In the simple deposit expansion model,if the Fed extends a $100 discount loan to a bank that previously had no excess reserves,deposits in the banking system can potentially increase by

Models describing the determination of the money supply and the Fed's role in this process normally focus on ________ rather than ________,since Fed actions have a more predictable effect on the former.

If a bank has excess reserves of $4,000 and demand deposit liabilities of $100,000,and if the reserve requirement is 15 percent,then the bank has actual reserves of

Suppose that from a new checkable deposit,First National Bank holds two million dollars in vault cash,eight million dollars on deposit with the Federal Reserve,and one million dollars in required reserves. Given this information,we can say First National Bank faces a required reserve ratio of ________ percent.

Everything else held constant,an increase in the required reserve ratio on checkable deposits causes the M1 money multiplier to ________ and the money supply to ________.