Exam 14: The Money Supply Process

Everything else held constant,a decrease in holdings of excess reserves will mean

Everything else held constant,an increase in the currency-checkable deposit ratio will mean

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

Everything else held constant,a decrease in the required reserve ratio on checkable deposits causes the M1 money multiplier to ________ and the money supply to ________.

Decisions by depositors to increase their holdings of ________,or of banks to hold excess reserves will result in a ________ expansion of deposits than the simple model predicts.

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 in required reserves.

The formula that links checkable deposits to the monetary base is

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 currency ratio is

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

The Fed does not tightly control the monetary base because it does not completely control

If a bank has excess reserves of $10,000 and demand deposit liabilities of $80,000,and if the reserve requirement is 20 percent,then the bank has actual reserves of

In the model of the money supply process,the Federal Reserve's role in influencing the money supply is represented by

The simple deposit multiplier can be expressed as the ratio of the

The formula for the M1 money multiplier is

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

Everything else held constant,an increase in currency holdings will cause

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

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

Everything else held constant,a decrease in the currency ratio causes the M1 money multiplier to ________ and the money supply to ________.

The three players in the money supply process include