Question 1

If you deposit $1,000 in cash in your checkable deposit at your bank,the quantity of M1 immediately

Accepted Answer

A) increases by $1,000. 
B) decreases by $1,000. 
C) increases by $2,000. 
D) does not change in size. 
E) changes,but more information about the required reserve ratio is necessary to determine the amount of the change. 
A) increases by $1,000. 
B) decreases by $1,000. 
C) increases by $2,000. 
D) does not change in size. 
E) changes,but more information about the required reserve ratio is necessary to determine the amount of the change.

Question 2

Which statement most accurately captures the state of money today?

Accepted Answer

A) Money today includes currency,bank deposits and checks. 
B) Money today includes currency and checks but not bank deposits. 
C) Money today includes bank deposits and currency but not checks. 
D) Money today includes bank deposits and checks but not currency. 
E) Money today includes checks and credit cards. 
A) Money today includes currency,bank deposits and checks. 
B) Money today includes currency and checks but not bank deposits. 
C) Money today includes bank deposits and currency but not checks. 
D) Money today includes bank deposits and checks but not currency. 
E) Money today includes checks and credit cards.

Question 3

-The above table gives assets and deposits for a (small)bank.The bank's reserves are equal to

Accepted Answer

A) $20. 
B) $30. 
C) $600. 
D) $630. 
E) $620. 
A) $20. 
B) $30. 
C) $600. 
D) $630. 
E) $620.

Question 4

The Second National Bank of Townville has $400,000 in checking deposits,$125,000 in savings deposits,$500,000 in loans,$20,000 in its reserve account at the Fed,and $5,000 of currency in its vault.What is the amount of these assets and liabilities that is in M1?

Accepted Answer

The only deposit that is in M1

Question 5

Which of the following is a policy tool of the Fed?
I.setting the required reserve ratios
Ii.conducting open market operations
Iii.quantitative easing

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) Both i and ii 
E) i,ii,and iii 
A) i only 
B) ii only 
C) iii only 
D) Both i and ii 
E) i,ii,and iii

Question 6

What is the FOMC? Who are the members of the FOMC? What policy does the FOMC decide?

Accepted Answer

The FOMC is the Federal Open Market Comm

Question 7

The Fed influences the interest rate by using which of the following tools?
I.open market operations
Ii.taxes on bank accounts
Iii.changes in required reserve ratios

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) Both i and iii 
E) i,ii and iii 
A) i only 
B) ii only 
C) iii only 
D) Both i and iii 
E) i,ii and iii

Question 8

When the Fed conducts an open market purchase,the first round changes in the money creation process are that excess reserves ________,bank deposits ________,and the quantity of money ________.

Accepted Answer

A) decrease;decrease;decreases 
B) increase;do not change;increases 
C) decrease;increase;does not change 
D) do not change;increase;increases 
E) increase;increase;increases 
A) decrease;decrease;decreases 
B) increase;do not change;increases 
C) decrease;increase;does not change 
D) do not change;increase;increases 
E) increase;increase;increases

Question 9

Which of the following best defines what money is now and what it has been in the past?

Accepted Answer

A) currency 
B) currency plus checking deposits 
C) currency plus credit cards 
D) anything accepted as a means of payment 
E) anything used as a store of value 
A) currency 
B) currency plus checking deposits 
C) currency plus credit cards 
D) anything accepted as a means of payment 
E) anything used as a store of value

Question 10

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 11

During the 2008 financial crisis,banks restricted ________,and the M2 money multiplier ________.

Accepted Answer

A) lending;decreased 
B) lending;increased 
C) deposits;increased 
D) buying securities;increased 
E) deposits;decreased 
A) lending;decreased 
B) lending;increased 
C) deposits;increased 
D) buying securities;increased 
E) deposits;decreased

Question 12

Which statement about money is most correct?

Accepted Answer

A) Money is a new invention and only includes dollar bills and coins. 
B) Money is a new invention and can include anything that is accepted as a means of payment. 
C) Money has been around for a long time and can include anything that is accepted as a means of payment. 
D) Money has been around for a long time and only includes dollar bills and coins. 
E) Money has been around for a long time and only includes checking and savings accounts. 
A) Money is a new invention and only includes dollar bills and coins. 
B) Money is a new invention and can include anything that is accepted as a means of payment. 
C) Money has been around for a long time and can include anything that is accepted as a means of payment. 
D) Money has been around for a long time and only includes dollar bills and coins. 
E) Money has been around for a long time and only includes checking and savings accounts.

Question 13

What is a "currency drain"? How and why does it affect the money multiplier?

Accepted Answer

An increase in currency held outside the

Question 14

"Even though we can convert them into money,deposits at banks are not money." Is the previous statement correct or not?

Accepted Answer

The statement is incorrect.Som

Question 15

A bank has $250 in checking deposits,$1,000 in savings deposits,$1,200 in time deposits,$1,000 in loans to businesses,$400 in outstanding credit card balances,$800 in government securities,$25 in currency in its vault,and $25 in deposits at the Fed.The bank's reserves are equal to

Accepted Answer

A) $25. 
B) $275. 
C) $2,225 
D) $50. 
E) $350. 
A) $25. 
B) $275. 
C) $2,225 
D) $50. 
E) $350.

Question 16

________ like a check and ________ considered money.

Accepted Answer

A) Debit cards work;are not 
B) Debit cards work;are 
C) E-checks work;are 
D) E-cash works;is not 
E) E-cash works;is 
A) Debit cards work;are not 
B) Debit cards work;are 
C) E-checks work;are 
D) E-cash works;is not 
E) E-cash works;is

Question 17

The ________ the desired reserve ratio,the ________ the ________ in the quantity of money created from an initial increase of $100,000 in the monetary base.

Accepted Answer

A) larger;larger;decrease 
B) larger;larger;increase 
C) larger;smaller;decrease 
D) smaller;larger;decrease 
E) smaller;larger;increase 
A) larger;larger;decrease 
B) larger;larger;increase 
C) larger;smaller;decrease 
D) smaller;larger;decrease 
E) smaller;larger;increase

Question 18

Which of the following is NOT among the primary functions of money?

Accepted Answer

A) unit of account 
B) store of value 
C) indicator of supply 
D) medium of exchange 
E) an object that is generally accepted in return for goods and services 
A) unit of account 
B) store of value 
C) indicator of supply 
D) medium of exchange 
E) an object that is generally accepted in return for goods and services

Question 19

________ by the Fed means that the Fed ________.

Accepted Answer

A) Credit easing;bought private securities from financial institutions 
B) Credit easing;made loans directly to home buyers 
C) Credit easing;tried to lower long-term interest rates 
D) Quantitative easing;required private banks to increase their lending to home buyers 
E) Quantitative easing;decreased in the required reserve ratio 
A) Credit easing;bought private securities from financial institutions 
B) Credit easing;made loans directly to home buyers 
C) Credit easing;tried to lower long-term interest rates 
D) Quantitative easing;required private banks to increase their lending to home buyers 
E) Quantitative easing;decreased in the required reserve ratio

Question 20

Money is best defined as

Accepted Answer

A) anything that has value. 
B) anything accepted as a means of payment. 
C) anything that can be sold to pay for something. 
D) currency. 
E) anything that is backed by gold. 
A) anything that has value. 
B) anything accepted as a means of payment. 
C) anything that can be sold to pay for something. 
D) currency. 
E) anything that is backed by gold.

If you deposit $1,000 in cash in your checkable deposit at your bank,the quantity of M1 immediately

Which statement most accurately captures the state of money today?

-The above table gives assets and deposits for a (small)bank.The bank's reserves are equal to

The Second National Bank of Townville has $400,000 in checking deposits,$125,000 in savings deposits,$500,000 in loans,$20,000 in its reserve account at the Fed,and $5,000 of currency in its vault.What is the amount of these assets and liabilities that is in M1?

Which of the following is a policy tool of the Fed? I.setting the required reserve ratios Ii.conducting open market operations Iii.quantitative easing

What is the FOMC? Who are the members of the FOMC? What policy does the FOMC decide?

The Fed influences the interest rate by using which of the following tools? I.open market operations Ii.taxes on bank accounts Iii.changes in required reserve ratios

When the Fed conducts an open market purchase,the first round changes in the money creation process are that excess reserves ,bank deposits ,and the quantity of money .

Which of the following best defines what money is now and what it has been in the past?

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.

During the 2008 financial crisis,banks restricted ,and the M2 money multiplier .

Which statement about money is most correct?

What is a "currency drain"? How and why does it affect the money multiplier?

"Even though we can convert them into money,deposits at banks are not money." Is the previous statement correct or not?

A bank has $250 in checking deposits,$1,000 in savings deposits,$1,200 in time deposits,$1,000 in loans to businesses,$400 in outstanding credit card balances,$800 in government securities,$25 in currency in its vault,and $25 in deposits at the Fed.The bank's reserves are equal to

like a check and considered money.

The the desired reserve ratio,the the in the quantity of money created from an initial increase of $100,000 in the monetary base.

Which of the following is NOT among the primary functions of money?

by the Fed means that the Fed .

Money is best defined as

Getting Started

The Usand 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

If you deposit $1,000 in cash in your checkable deposit at your bank,the quantity of M1 immediately

Which statement most accurately captures the state of money today?

-The above table gives assets and deposits for a (small)bank.The bank's reserves are equal to

The Second National Bank of Townville has $400,000 in checking deposits,$125,000 in savings deposits,$500,000 in loans,$20,000 in its reserve account at the Fed,and $5,000 of currency in its vault.What is the amount of these assets and liabilities that is in M1?

Which of the following is a policy tool of the Fed? I.setting the required reserve ratios Ii.conducting open market operations Iii.quantitative easing

What is the FOMC? Who are the members of the FOMC? What policy does the FOMC decide?

The Fed influences the interest rate by using which of the following tools? I.open market operations Ii.taxes on bank accounts Iii.changes in required reserve ratios

When the Fed conducts an open market purchase,the first round changes in the money creation process are that excess reserves ________,bank deposits ________,and the quantity of money ________.

Which of the following best defines what money is now and what it has been in the past?

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.

During the 2008 financial crisis,banks restricted ________,and the M2 money multiplier ________.

Which statement about money is most correct?

What is a "currency drain"? How and why does it affect the money multiplier?

"Even though we can convert them into money,deposits at banks are not money." Is the previous statement correct or not?

A bank has $250 in checking deposits,$1,000 in savings deposits,$1,200 in time deposits,$1,000 in loans to businesses,$400 in outstanding credit card balances,$800 in government securities,$25 in currency in its vault,and $25 in deposits at the Fed.The bank's reserves are equal to

________ like a check and ________ considered money.

The ________ the desired reserve ratio,the ________ the ________ in the quantity of money created from an initial increase of $100,000 in the monetary base.

Which of the following is NOT among the primary functions of money?

________ by the Fed means that the Fed ________.

Money is best defined as

Getting Started

The Usand 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

When the Fed conducts an open market purchase,the first round changes in the money creation process are that excess reserves ,bank deposits ,and the quantity of money .

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.

During the 2008 financial crisis,banks restricted ,and the M2 money multiplier .

like a check and considered money.

The the desired reserve ratio,the the in the quantity of money created from an initial increase of $100,000 in the monetary base.

by the Fed means that the Fed .