Exam 14: The Money Supply Process

The increase in the availability of ATM's has caused the cost of acquiring currency to ________ which will cause the currency ratio to ________,everything else held constant.

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

There are two ways in which the Fed can provide additional reserves to the banking system: it can ________ government bonds or it can ________ discount loans to commercial banks.

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 $500 when the required reserve ratio is equal to 10 percent implies that the Fed

In the model of the money supply process for M2,the relationship between checkable deposits and the M2 money supply is represented by

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

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.

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

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 $1000 billion,and excess reserves total $1 billion,then the money supply is ________ billion.

If the required reserve ratio is 15 percent,currency in circulation is $400 billion,checkable deposits are $1000 billion,and excess reserves total $1 billion,then the M1 money multiplier is

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

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

A bank has excess reserves of $1,000 and demand deposit liabilities of $80,000 when the reserve requirement is 20 percent.If the reserve requirement is lowered to 10 percent,the bank's excess reserves will be

A bank has excess reserves of $1,000 and demand deposit liabilities of $80,000 when the reserve requirement is 25 percent.If the reserve requirement is lowered to 20 percent,the bank's excess reserves will be

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 currency ratio is

If the required reserve ratio is one-third,currency in circulation is $300 billion,checkable deposits are $900 billion,and there is no excess reserve,then the monetary base is

The Fed can exert more precise control over ________ than it can over ________.