Exam 15: Money, Banking, and Central Banking

Following a new deposit of $100 at a bank, drawn on funds previously held on deposit at another bank, when the reserve ratio is 10 percent, the maximum potential increase in the money supply will be

By affecting the amount of reserves in the banking system, the Fed can

Which of the following depository institutions is NOT regulated by a government agency?

Given a required reserve ratio of 20 percent, a commercial bank that has received a new deposit of $100 can make additional loans of

When money provides a yardstick that allows individuals to compare the relative values of goods and services, it is functioning as a

The likelihood that individuals who seek to borrow money may use the funds for unworthy, high-risk projects is

A statement of assets and liabilities of any business entity is

Why does the money supply increase when the Fed buys a bond but does NOT change when a business buys a bond?

People with savings often deposit their funds in a commercial bank, rather than investing them directly with business enterprises, in order to

The most important function of the Fed is to

Suppose that the actual money multiplier equals the maximum potential money multiplier. If the reserve ratio is 10 percent, in order for the banking system to increase deposits by $2.5 million, the Fed must

The Federal Reserve System acts as the government's fiscal agent by

Which of the following assets are counted in M2?

When you make a purchase at a retail store by giving your bank an instruction to transfer funds directly from your bank account to the store's bank account, you have most likely made the purchase using

The U.S. central bank performs all the following roles for the nation EXCEPT

A deposit in a financial institution that requires notice of intent to withdraw is a

-According to the above table, the value of M2 is

If depository insurance exists, bank managers may make riskier loans than they would have otherwise, which is an example of

Assuming a reserve ratio of 20 percent, if a bank receives $100,000 in deposits how much can the bank loan out?

Money is still useful during times of inflation because