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 currency-deposit ratio is

Explain two reasons why the Fed does not have complete control over the level of bank deposits and loans.Explain how a change in either factor affects the deposit expansion process.

When the Fed extends a $100 discount loan to the First National Bank,reserves in the banking system

If reserves in the banking system increase by $200,then checkable deposits will increase by $500 in the simple model of deposit creation when the required reserve ratio is

Suppose that from a new checkable deposit,First National Bank holds two million dollars in vault cash,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 on deposit with the Federal Reserve.

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

Individuals that lend funds to a bank by opening a checking account are called

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 excess reserves-checkable deposit ratio is

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.

Suppose that from a new checkable deposit,First National Bank holds eight million dollars on deposit with the Federal Reserve,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 in vault cash.

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

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

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.

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 excess reserves-checkable deposit ratio is

The upward trend in the currency-deposit ratio during 1994-2007 can be explained by

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.

The steepest increase in the currency ratio since 1892 occurred during

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

Subtracting borrowed reserves from the monetary base obtains

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