Exam 14: The Money Supply Process

Everything else held constant,an increase in the required reserve ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply.

If the required reserve ratio is 10 percent,currency in circulation is $1,200 billion,checkable deposits are $1,600 billion,and excess reserves total $2,500 billion,then the M1 money multiplier is

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

Of the three players in the money supply process,most observers agree that the most important player is

In the simple deposit expansion model,a decline in checkable deposits of $500 when the required reserve ratio is equal to 20 percent implies that the Fed

In the simple deposit expansion model,if the required reserve ratio is 10 percent and the Fed increases reserves by $100,checkable deposits can potentially expand by

Assuming initially that the required reserve ratio = 10%,the currency-deposit ratio = 40%,and the excess reserve ratio = 0,an increase in the required reserve ratio to 15% causes the M1 money multiplier to ________,everything else held constant.

The monetary liabilities of the Federal Reserve include

A decrease in ________ leads to an equal ________ in the monetary base in the short run.

When a primary dealer buys a government bond from the Federal Reserve,reserves in the banking system ________ and the monetary base ________,everything else held constant.

The interest rate the Fed charges banks borrowing from the Fed is the

The money supply is ________ related to expected deposit outflows,and is ________ related to the market interest rate.

Assuming initially that the required reserve ratio = 10%,the currency-deposit ratio = 40%,and the excess reserve ratio = 0,a decrease in the required reserve ratio to 5% causes the M1 money multiplier to ________,everything else held constant.

During the bank panics of the Great Depression the excess reserve ratio

The monetary base minus reserves equals

If the required reserve ratio is 20 percent,the simple deposit multiplier is

If a bank has excess reserves of $20,000 and demand deposit liabilities of $80,000,and if the reserve requirement is 20 percent,then the bank has total reserves of

The ratio that relates the change in the money supply to a given change in the monetary base is called the

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

An increase in the nonborrowed monetary base,everything else held constant,will cause