Exam 14: The Money Supply Process

Recognizing the distinction between borrowed reserves and the nonborrowed monetary base,the money supply model is specified as

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

If the required reserve ratio is equal to 10 percent,a single bank can increase its loans up to a maximum amount equal to

There are two ways in which the Fed can provide additional reserves to the banking system: it can ________ government bonds or it can ________ discount loans to commercial banks.

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

Part of the increase in currency holdings in the 1960s and 1970s can be attributed to

Models describing the determination of the money supply and the Fed's role in this process normally focus on ________ rather than ________,since Fed actions have a more predictable effect on the former.

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

In the model of the money supply process for M2,the relationship between checkable deposits and the M2 money supply is represented by

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 monetary base is

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 excess reserves-checkable deposit ratio is

Which of the following are not assets on the Fed's balance sheet?

In the early 1930s,the currency ratio rose,as did the level of excess reserves.Money supply analysis predicts that,everything else held constant,the money supply should have

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

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

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

Since the Federal Reserve sets the required reserve ratio to less than one,one dollar of reserves can support ________ of checkable deposits.

In the simple deposit expansion model,if the banking system has excess reserves of $75,and the required reserve ratio is 20%,the potential expansion of checkable deposits 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 ________,the open market purchase has no effect on reserves; if the proceeds are kept as ________,reserves increase by the amount of the open market purchase.

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