Question 1

Money today

Accepted Answer

A) is the demand for loanable funds. 
B) is the supply of loanable funds. 
C) is only currency inside banks. 
D) is fiat money. 
E) in the United States, is only dollar bills and coins . 
A) is the demand for loanable funds. 
B) is the supply of loanable funds. 
C) is only currency inside banks. 
D) is fiat money. 
E) in the United States, is only dollar bills and coins .

Question 2

The monetary base is equal to

Accepted Answer

A) banks' assets plus liabilities. 
B) Federal Reserve notes plus coins plus banks' reserves at the Fed. 
C) checkable deposits plus coins plus and traveler's checks. 
D) checkable deposits plus coins plus banks' assets. 
E) M2 minus M1. 
A) banks' assets plus liabilities. 
B) Federal Reserve notes plus coins plus banks' reserves at the Fed. 
C) checkable deposits plus coins plus and traveler's checks. 
D) checkable deposits plus coins plus banks' assets. 
E) M2 minus M1.

Question 3

When we use money to purchase goods and services, we are using money as a

Accepted Answer

A) unit of account. 
B) reserve of wealth. 
C) medium of exchange. 
D) store of value. 
E) bartering tool. 
A) unit of account. 
B) reserve of wealth. 
C) medium of exchange. 
D) store of value. 
E) bartering tool.

Question 4

Which statement is most correct about the types of deposits a commercial bank can accept?

Accepted Answer

A) A commercial bank accepts checking, savings and time deposits. 
B) A commercial bank can only accept checking deposits from commercial enterprises. 
C) A commercial bank accepts savings and time deposits, but not checking deposits. 
D) A commercial bank does not accept deposits but sells shares. 
E) A commercial bank can accept loan deposits, reserve deposits, and checkable deposits. 
A) A commercial bank accepts checking, savings and time deposits. 
B) A commercial bank can only accept checking deposits from commercial enterprises. 
C) A commercial bank accepts savings and time deposits, but not checking deposits. 
D) A commercial bank does not accept deposits but sells shares. 
E) A commercial bank can accept loan deposits, reserve deposits, and checkable deposits.

Question 5

If the Federal Reserve ________ the required reserve ratio, the interest rate ________.

Accepted Answer

A) lowers; rises 
B) lowers; falls 
C) raises; does not change 
D) raises; falls 
E) Not enough information is given because the effect depends also on the size of the monetary base. 
A) lowers; rises 
B) lowers; falls 
C) raises; does not change 
D) raises; falls 
E) Not enough information is given because the effect depends also on the size of the monetary base.

Question 6

An open market purchase of securities by the Fed leads to all of the following EXCEPT

Accepted Answer

A) an initial increase in excess reserves. 
B) an increase in bank lending. 
C) a decrease in the quantity of money. 
D) an increase in banks' reserves. 
E) an increase in the monetary base. 
A) an initial increase in excess reserves. 
B) an increase in bank lending. 
C) a decrease in the quantity of money. 
D) an increase in banks' reserves. 
E) an increase in the monetary base.

Question 7

The objects that we use as money today are

Accepted Answer

A) checks and credit cards. 
B) currency and checks. 
C) currency and deposits. 
D) deposits and checks. 
E) currency, deposits, and gold. 
A) checks and credit cards. 
B) currency and checks. 
C) currency and deposits. 
D) deposits and checks. 
E) currency, deposits, and gold.

Question 8

A commercial bank's reserves are equal to the amount of

Accepted Answer

A) the bank's deposits. 
B) the bank's government securities. 
C) the bank's loans. 
D) currency in the bank's vault plus the balance on its reserve account at a Federal Reserve Bank. 
E) only the currency in its vault. 
A) the bank's deposits. 
B) the bank's government securities. 
C) the bank's loans. 
D) currency in the bank's vault plus the balance on its reserve account at a Federal Reserve Bank. 
E) only the currency in its vault.

Question 9

The Fed's policy is determined by the

Accepted Answer

A) Federal Open Market Committee. 
B) Executive Council to the Governor. 
C) Regional Federal Reserve Banks. 
D) Board of Governors. 
E) Federal Monetary Policy Committee. 
A) Federal Open Market Committee. 
B) Executive Council to the Governor. 
C) Regional Federal Reserve Banks. 
D) Board of Governors. 
E) Federal Monetary Policy Committee.

Question 10

The president of which Federal Reserve bank is always a voting member of the FOMC?
 Why?

Accepted Answer

The president of the New York Federal Re

Question 11

When Dale buys a new computer for $1,000 using a credit card,

Accepted Answer

A) he is taking out a loan for $1,000. 
B) his bank account decreases by $1,000. 
C) the credit card is acting as money. 
D) the money supply decreases by $1,000. 
E) the credit card is performing the function of an unit of account. 
A) he is taking out a loan for $1,000. 
B) his bank account decreases by $1,000. 
C) the credit card is acting as money. 
D) the money supply decreases by $1,000. 
E) the credit card is performing the function of an unit of account.

Question 12

Open market operations are defined as

Accepted Answer

A) a bank borrowing from the Fed. 
B) the buying and selling of securities by the Fed. 
C) the buying and selling of securities between banks. 
D) the amount banks can lend on each deposit. 
E) a bank making a loan to the Fed. 
A) a bank borrowing from the Fed. 
B) the buying and selling of securities by the Fed. 
C) the buying and selling of securities between banks. 
D) the amount banks can lend on each deposit. 
E) a bank making a loan to the Fed.

Question 13

What is the structure of the Federal Reserve Bank System?

Accepted Answer

The key elements in the structure of the

Question 14

Explain which of the following count as money.
a. a check in Ann's checkbook
b. currency in Ann's bank
c. currency in Ann's purse
d. Ann's checking deposit

Accepted Answer

Only parts (c), currency in Ann's purse,

Question 15

The FUN Bank has no excess reserves when a new deposit of $20,000 is made. The desired reserve ratio is 5 percent. After the deposit, but before making any loans, how much does The FUN Bank have in excess reserves?

Accepted Answer

A) $1,000 
B) $20,000 
C) $9,000 
D) $19,000 
E) $21,000 
A) $1,000 
B) $20,000 
C) $9,000 
D) $19,000 
E) $21,000

Question 16

The Fed purchases $100 million of U.S. government securities from First National Bank. The balance sheet for First National Bank shows ________ in its total assets and ________ in its total liabilities.

Accepted Answer

A) a $100 million increase; a $100 million increase 
B) a $100 million decrease; a $100 million increase 
C) a $100 million increase; a $100 million decrease 
D) no change; no change 
E) a $100 million increase; no change 
A) a $100 million increase; a $100 million increase 
B) a $100 million decrease; a $100 million increase 
C) a $100 million increase; a $100 million decrease 
D) no change; no change 
E) a $100 million increase; no change

Question 17

The word "fiat" is

Accepted Answer

A) used to describe today's money because it is money set by law. 
B) used to describe money from when Kings ruled by decree or fiat. 
C) the term used to define the concept of barter. 
D) another word to mean the "double coincidence of wants." 
E) Latin for "backed by gold." 
A) used to describe today's money because it is money set by law. 
B) used to describe money from when Kings ruled by decree or fiat. 
C) the term used to define the concept of barter. 
D) another word to mean the "double coincidence of wants." 
E) Latin for "backed by gold."

Question 18

When we keep part of our wealth in a bank checking account, we are using money as a

Accepted Answer

A) store of value. 
B) medium of exchange. 
C) barter token. 
D) unit of account. 
E) unit of currency. 
A) store of value. 
B) medium of exchange. 
C) barter token. 
D) unit of account. 
E) unit of currency.

Question 19

Credit cards, debit cards, and e-checks are

Accepted Answer

A) always counted as money. 
B) not money. 
C) sometimes counted as money, depending on how they are used. 
D) sometimes counted as money, depending on what is purchased. 
E) sometimes counted as money, depending on what measure of money is being used. 
A) always counted as money. 
B) not money. 
C) sometimes counted as money, depending on how they are used. 
D) sometimes counted as money, depending on what is purchased. 
E) sometimes counted as money, depending on what measure of money is being used.

Question 20

Which of the following lists includes only banks' assets?

Accepted Answer

A) liquid assets, loans, securities, and reserves 
B) reserves, savings deposits, securities, and loans 
C) reserves, securities, liquid assets, and savings deposits 
D) securities, reserves, checkable deposits, and liquid assets 
E) reserves, checkable deposits, securities, and loans 
A) liquid assets, loans, securities, and reserves 
B) reserves, savings deposits, securities, and loans 
C) reserves, securities, liquid assets, and savings deposits 
D) securities, reserves, checkable deposits, and liquid assets 
E) reserves, checkable deposits, securities, and loans

Money today

The monetary base is equal to

When we use money to purchase goods and services, we are using money as a

Which statement is most correct about the types of deposits a commercial bank can accept?

If the Federal Reserve the required reserve ratio, the interest rate .

An open market purchase of securities by the Fed leads to all of the following EXCEPT

The objects that we use as money today are

A commercial bank's reserves are equal to the amount of

The Fed's policy is determined by the

The president of which Federal Reserve bank is always a voting member of the FOMC? Why?

When Dale buys a new computer for $1,000 using a credit card,

Open market operations are defined as

What is the structure of the Federal Reserve Bank System?

Explain which of the following count as money. a. a check in Ann's checkbook b. currency in Ann's bank c. currency in Ann's purse d. Ann's checking deposit

The FUN Bank has no excess reserves when a new deposit of $20,000 is made. The desired reserve ratio is 5 percent. After the deposit, but before making any loans, how much does The FUN Bank have in excess reserves?

The Fed purchases $100 million of U.S. government securities from First National Bank. The balance sheet for First National Bank shows in its total assets and in its total liabilities.

The word "fiat" is

When we keep part of our wealth in a bank checking account, we are using money as a

Credit cards, debit cards, and e-checks are

Which of the following lists includes only banks' assets?

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 18: Money and the Monetary System

Money today

The monetary base is equal to

When we use money to purchase goods and services, we are using money as a

Which statement is most correct about the types of deposits a commercial bank can accept?

If the Federal Reserve ________ the required reserve ratio, the interest rate ________.

An open market purchase of securities by the Fed leads to all of the following EXCEPT

The objects that we use as money today are

A commercial bank's reserves are equal to the amount of

The Fed's policy is determined by the

The president of which Federal Reserve bank is always a voting member of the FOMC? Why?

When Dale buys a new computer for $1,000 using a credit card,

Open market operations are defined as

What is the structure of the Federal Reserve Bank System?

Explain which of the following count as money. a. a check in Ann's checkbook b. currency in Ann's bank c. currency in Ann's purse d. Ann's checking deposit

The FUN Bank has no excess reserves when a new deposit of $20,000 is made. The desired reserve ratio is 5 percent. After the deposit, but before making any loans, how much does The FUN Bank have in excess reserves?

The Fed purchases $100 million of U.S. government securities from First National Bank. The balance sheet for First National Bank shows ________ in its total assets and ________ in its total liabilities.

The word "fiat" is

When we keep part of our wealth in a bank checking account, we are using money as a

Credit cards, debit cards, and e-checks are

Which of the following lists includes only banks' assets?

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

If the Federal Reserve the required reserve ratio, the interest rate .

The Fed purchases $100 million of U.S. government securities from First National Bank. The balance sheet for First National Bank shows in its total assets and in its total liabilities.