Exam 14: The Money Supply Process

The M2 money supply is represented by

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 has ________ million dollars in excess reserves.

When banks borrow money from the Federal Reserve,these funds are called

In the simple deposit expansion model,a decline in checkable deposits of $500 when the required reserve ratio is equal to 10 percent implies that the Fed

In the model of the money supply process,the bank's role in influencing the money supply process is represented by

Special Drawing Rights (SDRs)are issued to governments by the ________ to settle international debts and have replaced ________ in international transactions.

In the simple deposit expansion model,a decline in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed

A bank has excess reserves of $10,000 and demand deposit liabilities of $100,000 when the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent,the bank's excess reserves will be

If a bank has excess reserves of $7,000 and demand deposit liabilities of $100,000,and if the reserve requirement is 15 percent,then the bank has actual reserves of

In the simple deposit expansion model,if the Fed extends a $100 discount loan to a bank that previously had no excess reserves,the bank can now increase its loans by

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 nine million dollars in excess reserves. Given this information,we can say First National Bank faces a required reserve ratio of ________ percent.

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

The government agency that oversees the banking system and is responsible for the conduct of monetary policy in the United States is

Everything else held constant,an increase in the money market fund ratio will result in ________ in the M1 money multiplier and ________ in the M2 money multiplier.

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 monetary base is

The sum of the Fed's monetary liabilities and the U.S. Treasury's monetary liabilities is called

Everything else held constant,a decrease in the required reserve ratio on checkable deposits will mean

The three players in the money supply process include

The M2 money multiplier is

Decisions by ________ about their holdings of currency and by ________ about their holdings of excess reserves affect the money supply.