Exam 14: The Money Supply Process

Assuming initially that the required reserve ratio = 15%,the currency-deposit ratio = 40%,and the excess reserve ratio = 5%,a decrease in the excess reserve ratio to 0% causes the M1 money multiplier to ________,everything else held constant.

Everything else held constant,a decrease in the currency ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier.

In the early 1930s,the currency-deposit ratio rose,as did the level of excess reserves. Money supply analysis predicts that,everything else held constant,the money supply should have

A simple deposit multiplier equal to two implies a required reserve ratio equal to

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

An increase in U.S. Treasury deposits at the Fed reduces both ________ and the ________.

Suppose a person cashes his payroll check and holds all the funds in the form of currency. Everything else held constant,total reserves in the banking system ________ and the monetary base ________.

If a bank has excess reserves of $4,000 and demand deposit liabilities of $100,000,and if the reserve requirement is 10 percent,then the bank has actual reserves of

Excess reserves are equal to

Assuming initially that the required reserve ratio = 10%,the currency-deposit ratio = 40%,and the excess reserve ratio = 0,an decrease in the currency-deposit ratio to 30% causes the M1 money multiplier to ________,everything else held constant.

Everything else held constant,an increase in the interest rate paid on checkable deposits will cause ________ in the amount of checkable deposits held relative to currency holdings and ________ in the currency ratio.

If reserves in the banking system increase by $100,then checkable deposits will increase by $667 in the simple model of deposit creation when the required reserve ratio is

Since the Federal Reserve sets the required reserve ratio to less than one,one dollar of reserves can support ________ of checkable deposits.

In the simple deposit expansion model,if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves,deposits in the banking system can potentially increase by

Everything else held constant,an increase in wealth will cause the holdings of checkable deposits to the holdings of currency to ________ and the currency ratio will ________.

A simple deposit multiplier equal to four implies a required reserve ratio equal to

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 currency-deposit ratio is

The Fed's holdings of securities consist primarily of ________,but also in the past have included ________.

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 M1 money multiplier is

A bank has excess reserves of $4,000 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