Question 1

Currency in the form of Federal Reserve notes are primarily backed by gold certificates and eligible paper.
Not in chapter

Accepted Answer

A) True 
 B)False

Question 2

In fall 2008, the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

Accepted Answer

A) Economic Stimulus Act 
B) Economic Recovery Act 
C) Economic Expansion Act 
D) Economic Booster Act 
E) none of the above 
A) Economic Stimulus Act 
B) Economic Recovery Act 
C) Economic Expansion Act 
D) Economic Booster Act 
E) none of the above

Question 3

In an effort to stimulate economic activity, Congress and the president passed the $787 billion _________________________________ in February, 2009 with the funds to be used to provide tax relief, appropriations, and direct spending.

Accepted Answer

A) American Reconstruction and Reconfiguration Act of 2009 
B) American Real Estate and Reconstruction Act of 2009 
C) American Real Estate Reinvestment Act of 2009 
D) American Recovery and Reinvestment Act of 2009 
E) none of the above 
A) American Reconstruction and Reconfiguration Act of 2009 
B) American Real Estate and Reconstruction Act of 2009 
C) American Real Estate Reinvestment Act of 2009 
D) American Recovery and Reinvestment Act of 2009 
E) none of the above

Question 4

Deposits that add new reserves to the bank where they are deposited are called:

Accepted Answer

A) primary deposits 
B) derivative deposits 
C) secondary deposits 
D) Special Drawing Rights 
A) primary deposits 
B) derivative deposits 
C) secondary deposits 
D) Special Drawing Rights

Question 5

The "perfect financial storm" that developed in 2008, which put the U.S.economy was on the verge of collapse was characterized by all of the following EXCEPT:

Accepted Answer

A) The housing price "bubble" burst in 2006 and began a sharp decline. 
B) Stock market prices peaked in 2007 and began a sharp decline. 
C) Many of the mortgage-related debt securities originated and sold to others, or held, by banks became difficult to value during the perfect financial storm and quickly became known as "troubled" or "tonic" assets. 
D) Individuals and businesses were defaulting on loans and home mortgages in increasing numbers due to the weakening economy and falling home prices. 
E) All of the above were factors 
A) The housing price "bubble" burst in 2006 and began a sharp decline. 
B) Stock market prices peaked in 2007 and began a sharp decline. 
C) Many of the mortgage-related debt securities originated and sold to others, or held, by banks became difficult to value during the perfect financial storm and quickly became known as "troubled" or "tonic" assets. 
D) Individuals and businesses were defaulting on loans and home mortgages in increasing numbers due to the weakening economy and falling home prices. 
E) All of the above were factors

Question 6

Which of the following statements is most correct?

Accepted Answer

A) Bank reserves are not affected by transactions involving the Treasury. 
B) Derivative deposits occur when reserves created from primary deposits are made available through bank loans to borrowers who leave them on deposit in order to write checks against the funds. 
C) Total bank reserves in the banking system consist of bank's member bank deposits held in Federal Reserve Banks, plus non-member banks vault cash. 
D) Federal Reserve notes have been increasingly backed by gold certificates and eligible paper in recent years. 
A) Bank reserves are not affected by transactions involving the Treasury. 
B) Derivative deposits occur when reserves created from primary deposits are made available through bank loans to borrowers who leave them on deposit in order to write checks against the funds. 
C) Total bank reserves in the banking system consist of bank's member bank deposits held in Federal Reserve Banks, plus non-member banks vault cash. 
D) Federal Reserve notes have been increasingly backed by gold certificates and eligible paper in recent years.

Question 7

In fall 2008, the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

Accepted Answer

A) Economic Stimulus Act 
B) Economic Recovery Act 
C) Economic Stabilization Act 
D) Economic Booster Act 
E) none of the above 
A) Economic Stimulus Act 
B) Economic Recovery Act 
C) Economic Stabilization Act 
D) Economic Booster Act 
E) none of the above

Question 8

If a check is written for the full amount of a derivative deposit created by a bank loan and then is sent to a bank in another city for deposit:

Accepted Answer

A) the lending bank would lose all of its excess reserves 
B) the lending bank would still have reserves to lend 
C) the full amount would be added to the receiving bank's excess reserves 
D) both a and c 
A) the lending bank would lose all of its excess reserves 
B) the lending bank would still have reserves to lend 
C) the full amount would be added to the receiving bank's excess reserves 
D) both a and c

Question 9

11 10.The U.S.Treasury has primary responsibility for management of the federal debt.

Accepted Answer

A) True 
 B)False

Question 10

A government raises funds to pay for its activities in two ways: levies taxes or prints money for its own use.

Accepted Answer

A) True 
 B)False

Question 11

Budgetary deficits always have the effect of:

Accepted Answer

A) creating inflationary pressures 
B) crowding out private borrowerslenders 
C) forcing the Federal Reserve to buy government securities 
D) creating governmental competition for private investment funds 
A) creating inflationary pressures 
B) crowding out private borrowerslenders 
C) forcing the Federal Reserve to buy government securities 
D) creating governmental competition for private investment funds

Question 12

When a government borrows to finance budget deficits, crowding out may occur, which results in a restriction of available funds for private sector borrowers due to public sector demand.

Accepted Answer

A) True 
 B)False

Question 13

The velocity of money is expressed as the average number of times each dollar is spend on purchases of goods and services, and it is calculated as real GDP divided by M1.

Accepted Answer

A) True 
 B)False

Question 14

The Fed plays a significant role in tax policy.

Accepted Answer

A) True 
 B)False

Question 15

The monetary base is the banking system reserves, plus currency held by the public.

Accepted Answer

A) True 
 B)False

Question 16

The monetary base:

Accepted Answer

A) equals the money supply 
B) consists of checkable and noncheckable deposits 
C) consists of bank reserves, plus currency 
D) equals the money multiplier, plus bank reserves 
A) equals the money supply 
B) consists of checkable and noncheckable deposits 
C) consists of bank reserves, plus currency 
D) equals the money multiplier, plus bank reserves

Question 17

Primary groups of policy makers that are actively involved in achieving a nation'sU.S.economic policy objectives include all of the following EXCEPT:

Accepted Answer

A) the Federal Reserve System 
B) the President 
C) Congress 
D) all of the above are primary policy makers 
A) the Federal Reserve System 
B) the President 
C) Congress 
D) all of the above are primary policy makers

Question 18

Special Drawing Rights are a form of reserve asset or paper gold created by the:

Accepted Answer

A) Federal Reserve System 
B) U.S.Treasury 
C) commercial banking system 
D) International Monetary Fund 
A) Federal Reserve System 
B) U.S.Treasury 
C) commercial banking system 
D) International Monetary Fund

Question 19

The "perfect financial storm" that developed in 2008, which put the U.S.economy was on the verge of collapse was characterized by all of the following EXCEPT:

Accepted Answer

A) The housing price "bubble" burst in 2006 and began a sharp decline. 
B) Stock market prices peaked in 2007 and began a sharp decline. 
C) Many of the mortgage-related debt securities originated and sold to others, or held, by banks became difficult to value during the perfect financial storm and quickly became known as "tombstone" assets. 
D) Individuals were defaulting on their home mortgages in increasing numbers due to falling home prices and increasing unemployment. 
E) Business firms and financial institutions, who had borrowed heavily during years of easy money and low interest rates, were faced with their own financial difficulties as economic activity slowed markedly 
A) The housing price "bubble" burst in 2006 and began a sharp decline. 
B) Stock market prices peaked in 2007 and began a sharp decline. 
C) Many of the mortgage-related debt securities originated and sold to others, or held, by banks became difficult to value during the perfect financial storm and quickly became known as "tombstone" assets. 
D) Individuals were defaulting on their home mortgages in increasing numbers due to falling home prices and increasing unemployment. 
E) Business firms and financial institutions, who had borrowed heavily during years of easy money and low interest rates, were faced with their own financial difficulties as economic activity slowed markedly

Question 20

The basic function served by requiring adequate bank reserves in the monetary system is to:

Accepted Answer

A) assure bank liquidity 
B) provide the basis for the regulation of credit expansion and contraction 
C) maintain adequate capital for investors 
D) impose a burden of risk on bank stockholders 
E) none of the above 
A) assure bank liquidity 
B) provide the basis for the regulation of credit expansion and contraction 
C) maintain adequate capital for investors 
D) impose a burden of risk on bank stockholders 
E) none of the above

Currency in the form of Federal Reserve notes are primarily backed by gold certificates and eligible paper. Not in chapter

In fall 2008, the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

In an effort to stimulate economic activity, Congress and the president passed the $787 billion _________________________________ in February, 2009 with the funds to be used to provide tax relief, appropriations, and direct spending.

Deposits that add new reserves to the bank where they are deposited are called:

The "perfect financial storm" that developed in 2008, which put the U.S.economy was on the verge of collapse was characterized by all of the following EXCEPT:

Which of the following statements is most correct?

In fall 2008, the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

If a check is written for the full amount of a derivative deposit created by a bank loan and then is sent to a bank in another city for deposit:

11 10.The U.S.Treasury has primary responsibility for management of the federal debt.

A government raises funds to pay for its activities in two ways: levies taxes or prints money for its own use.

Budgetary deficits always have the effect of:

When a government borrows to finance budget deficits, crowding out may occur, which results in a restriction of available funds for private sector borrowers due to public sector demand.

The velocity of money is expressed as the average number of times each dollar is spend on purchases of goods and services, and it is calculated as real GDP divided by M1.

The Fed plays a significant role in tax policy.

The monetary base is the banking system reserves, plus currency held by the public.

The monetary base:

Primary groups of policy makers that are actively involved in achieving a nation'sU.S.economic policy objectives include all of the following EXCEPT:

Special Drawing Rights are a form of reserve asset or paper gold created by the:

The "perfect financial storm" that developed in 2008, which put the U.S.economy was on the verge of collapse was characterized by all of the following EXCEPT:

The basic function served by requiring adequate bank reserves in the monetary system is to:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 5: Policy Makers and the Money Supply

Currency in the form of Federal Reserve notes are primarily backed by gold certificates and eligible paper. Not in chapter

In fall 2008, the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

In an effort to stimulate economic activity, Congress and the president passed the $787 billion _________________________________ in February, 2009 with the funds to be used to provide tax relief, appropriations, and direct spending.

Deposits that add new reserves to the bank where they are deposited are called:

The "perfect financial storm" that developed in 2008, which put the U.S.economy was on the verge of collapse was characterized by all of the following EXCEPT:

Which of the following statements is most correct?

In fall 2008, the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

If a check is written for the full amount of a derivative deposit created by a bank loan and then is sent to a bank in another city for deposit:

11 10.The U.S.Treasury has primary responsibility for management of the federal debt.

A government raises funds to pay for its activities in two ways: levies taxes or prints money for its own use.

Budgetary deficits always have the effect of:

When a government borrows to finance budget deficits, crowding out may occur, which results in a restriction of available funds for private sector borrowers due to public sector demand.

The velocity of money is expressed as the average number of times each dollar is spend on purchases of goods and services, and it is calculated as real GDP divided by M1.

The Fed plays a significant role in tax policy.

The monetary base is the banking system reserves, plus currency held by the public.

The monetary base:

Primary groups of policy makers that are actively involved in achieving a nation'sU.S.economic policy objectives include all of the following EXCEPT:

Special Drawing Rights are a form of reserve asset or paper gold created by the:

The "perfect financial storm" that developed in 2008, which put the U.S.economy was on the verge of collapse was characterized by all of the following EXCEPT:

The basic function served by requiring adequate bank reserves in the monetary system is to:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters