Question 1

The Great Recession was the main cause of the Financial Crisis of 2007-2008.

Accepted Answer

A) True 
 B)False

Question 2

In the United States, all money is essentially the debt of the Fed, commercial banks, and thrift institutions.

Accepted Answer

A) True 
 B)False

Question 3

The destabilizing effects of defaulting mortgages quickly spread throughout the financial system because those mortgages were involved in widespread:

Accepted Answer

A)  Diversification 
B)  Securitization 
C)  Multiplier effect 
D)  Real-balance effect 
A)  Diversification 
B)  Securitization 
C)  Multiplier effect 
D)  Real-balance effect

Question 4

The major wave of defaults on home mortgages in 2007 destabilized:

Accepted Answer

A)  Only the banks that directly made the mortgage loans 
B)  Only the mortgage brokers; not the commercial banks 
C)  Many banks including those that made the loans indirectly 
D)  Mostly large banks, but not too many small ones 
A)  Only the banks that directly made the mortgage loans 
B)  Only the mortgage brokers; not the commercial banks 
C)  Many banks including those that made the loans indirectly 
D)  Mostly large banks, but not too many small ones

Question 5

Michelle transfers $4,000 from her savings account to her checking account. What effect is this change likely to have on M1 and M2?

Accepted Answer

A)  M1 decreases and M2 increases 
B)  M1 increases and M2 decreases 
C)  M1 increases and M2 stays the same 
D)  M2 increases and M1 stays the same 
A)  M1 decreases and M2 increases 
B)  M1 increases and M2 decreases 
C)  M1 increases and M2 stays the same 
D)  M2 increases and M1 stays the same

Question 6

Which of the following institutions does not provide checkable-deposit services to the general public?

Accepted Answer

A)  Commercial banks 
B)  Savings and loan associations 
C)  U.S. Treasury 
D)  Credit unions 
A)  Commercial banks 
B)  Savings and loan associations 
C)  U.S. Treasury 
D)  Credit unions

Question 7

An asset's liquidity refers to its ability to be:

Accepted Answer

A)  Bought and stored 
B)  Increasing in value over time 
C)  Used and enjoyed 
D)  A means of payment 
A)  Bought and stored 
B)  Increasing in value over time 
C)  Used and enjoyed 
D)  A means of payment

Question 8

The most important among the Federal Reserve district banks in conducting monetary policy is the:

Accepted Answer

A)  Boston bank 
B)  Chicago bank 
C)  New York bank 
D)  San Francisco bank 
A)  Boston bank 
B)  Chicago bank 
C)  New York bank 
D)  San Francisco bank

Question 9

Money supply M1 does not include the currency held by:

Accepted Answer

A)  Households in their wallets or purses 
B)  Business firms 
C)  Commercial banks 
D)  State and local governments 
A)  Households in their wallets or purses 
B)  Business firms 
C)  Commercial banks 
D)  State and local governments

Question 10

The M1 money supply is composed of currency, checkable deposits, and savings deposits.

Accepted Answer

A) True 
 B)False

The Great Recession was the main cause of the Financial Crisis of 2007-2008.

In the United States, all money is essentially the debt of the Fed, commercial banks, and thrift institutions.

The destabilizing effects of defaulting mortgages quickly spread throughout the financial system because those mortgages were involved in widespread:

The major wave of defaults on home mortgages in 2007 destabilized:

Michelle transfers $4,000 from her savings account to her checking account. What effect is this change likely to have on M1 and M2?

Which of the following institutions does not provide checkable-deposit services to the general public?

An asset's liquidity refers to its ability to be:

The most important among the Federal Reserve district banks in conducting monetary policy is the:

Money supply M1 does not include the currency held by:

The M1 money supply is composed of currency, checkable deposits, and savings deposits.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters

Exam 14: Money, Banking, and Financial Institutions

The Great Recession was the main cause of the Financial Crisis of 2007-2008.

In the United States, all money is essentially the debt of the Fed, commercial banks, and thrift institutions.

The destabilizing effects of defaulting mortgages quickly spread throughout the financial system because those mortgages were involved in widespread:

The major wave of defaults on home mortgages in 2007 destabilized:

Michelle transfers $4,000 from her savings account to her checking account. What effect is this change likely to have on M1 and M2?

Which of the following institutions does not provide checkable-deposit services to the general public?

An asset's liquidity refers to its ability to be:

The most important among the Federal Reserve district banks in conducting monetary policy is the:

Money supply M1 does not include the currency held by:

The M1 money supply is composed of currency, checkable deposits, and savings deposits.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters