Exam 16: The Money Supply Process

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

Both ________ and ________ are monetary liabilities of the Bank.

If a bank has excess reserves of $7,000 and demand deposit liabilities of $100,000,and if the reserve requirement is 15 percent,then the bank has actual reserves of ________.

When the monetary base is equal to $200 billion,the desired reserve ratio is 0.10 and the currency ratio is equal to 0.20,the money supply is equal to ________.

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

How changes in the nonborrowed monetary base affect the money supply?

When currency is equal to $200 billion and reserves are equal to $350 billion,and we know that the money multiplier is equal to 1.5,then the money supply will be equal to ________.

Assuming initially that r = 10 percent and c = 40 percent,a decrease in r to 5 percent causes ________.

A bank has no excess reserves and demand deposit liabilities of $100,000 when the desired reserve ratio is 20 percent.If the reserve ratio is raised to 25 percent,the bank's excess reserves will now be ________.

In the simple deposit expansion model,if the desired reserve ratio is 10 percent and the Bank of Canada increases reserves by $100,chequable deposits can potentially expand by ________.

If the desired reserve ratio is five percent,currency in circulation is $400 billion,and chequable deposits are $800 billion,then the money multiplier is approximately ________.

During the Great Depression ________.

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

Suppose your payroll cheque is directly deposited to your chequing account.Everything else held constant,total reserves in the banking system ________ and the monetary base ________.

In the model of the money supply process,the depositor's role in influencing the money supply is represented by ________.

If the desired reserve ratio is ten percent,currency in circulation is $400 billion,chequable deposits are $800 billion,and excess reserves total $0.8 billion,then the money supply is ________.

If the desired reserve ratio is one-third,currency in circulation is $300 billion,and chequable deposits are $900 billion,then the monetary base is ________.

The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds.If the proceeds are kept in currency,the open market purchase ________ reserves; if the proceeds are kept as deposits,the open market purchase ________ reserves.

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 ________.

If reserves in the banking system increase by $100,then chequable deposits will increase by $100 in the simple model of deposit creation when the desired reserve ratio is ________.