Exam 18: Money and the Monetary System

If the Fed buys a $100,000 government security from a bank when the desired reserve ratio is 20 percent and the currency drain ratio is 5 percent, the bank can loan a maximum of

Which statement most accurately captures the state of money today?

Amount (dollars) Checking deposits 600 Savings deposits 1000 Time deposits 1,500 Loans 1,200 Government securities 2,000 Outstanding credit card balances 400 Currency in vault 10 Deposits in reserve account at the Fed 20 -The above table gives assets and deposits for a (small)bank. The bank's reserves are equal to

If the required reserve ratio is 15 percent, there is no currency drain, and banks loan all of their excess reserves, an increase in the monetary base of $20,000 leads to a total increase in the quantity of money of

Which of the following policy tools did the Fed create in 2008 to address the financial crisis? i. quantitative easing ii. credit easing iii. open market operations

The interest rate the Federal Reserve charges a bank when it borrows reserves from the Fed is called the

What is barter? What is a double coincidence of wants? How does the existence of money affect barter?

The process of money creation by the banking system is limited, in part, by the

If the Fed sells government securities to a member of the nonbank public, then the resulting effect on the quantity of money is

In December 2009, currency outside of banks was $400 billion, traveler's checks were $5 billion; checkable deposits owned by individuals and businesses were $600 billion, saving deposits were $2,000 billion, time deposits were $1,500 billion; and money market funds were $1,200 billion. What was the M2 in December 2009?

If someone buries money in a tin can beneath a tree, the money is functioning as a

Which of the following Federal Reserve banks carries out the decisions of the FOMC?

Credit cards are i. a generally accepted form of payment and therefore part of M1. Ii. are included in M1 because you write a check to pay your monthly bill. Iii. a means of borrowing money.

Are credit cards or debit cards money? Explain your answer.

Banks create money by

What is the discount rate?

A currency drain is

Which of the following is a thrift institution? I. a credit union. Ii. the Fed Iii. a savings bank.

When the Fed sells $100 million of securities to a commercial bank the

The functions of money are