Exam 14: The Money Supply Process

The two most important categories of assets on the Fed's balance sheet are ________ and ________ because they earn interest.

A bank has no excess reserves 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 now be

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

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

If a bank has excess reserves of $5,000 and demand deposit liabilities of $80,000,and if the reserve requirement is 20 percent,then the bank has actual reserves of

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 simple deposit expansion model,if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves,the bank can now increase its loans by

The amount of borrowed reserves is ________ related to the discount rate,and is ________ related to the market interest rate.

The formula linking the money supply to the monetary base is

When the Fed purchases artwork to decorate the conference room at the Federal Reserve Bank of Kansas City,

Which is the most important category of Fed assets?

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

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

Assuming initially that rr = 10%,c = 40%,and e = 0,a decrease in rr to 5% causes the M1 money multiplier to ________,everything else held constant.

During the 2007-2009 financial crisis the currency ratio

The increase in the currency ratio during World War II was due to

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

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

Excess reserves are equal to

For which of the following is the change in reserves necessarily different from the change in the monetary base?