Question 1

If the desired reserve ratio is 7 percent and a bank has $10,000 of deposits,then its desired reserves are

Accepted Answer

A) $7. 
B) $700. 
C) $9,300. 
D) $930. 
E) $7,000. 
A) $7. 
B) $700. 
C) $9,300. 
D) $930. 
E) $7,000.

Question 2

The monetary multiplier is 3 and the change in the monetary base is $100,000.How much will the quantity of money increase?

Accepted Answer

A) $300,000 
B) $200,000 
C) $100,000 
D) $70,000 
E) $33,333 
A) $300,000 
B) $200,000 
C) $100,000 
D) $70,000 
E) $33,333

Question 3

When we keep part of our wealth in a bank checking account,we are using money as a

Accepted Answer

A) store of value. 
B) medium of exchange. 
C) barter token. 
D) unit of account. 
E) unit of currency. 
A) store of value. 
B) medium of exchange. 
C) barter token. 
D) unit of account. 
E) unit of currency.

Question 4

If the Fed purchases securities in the amount of $100,000 from First Union Bank,then the

Accepted Answer

A) assets of First Union Bank decrease by $100,000. 
B) assets of the Fed decrease by $100,000. 
C) assets of First Union Bank change in composition but not in amount. 
D) liabilities of the Fed change in composition but not in amount. 
E) liabilities of First Union decrease by $100,000. 
A) assets of First Union Bank decrease by $100,000. 
B) assets of the Fed decrease by $100,000. 
C) assets of First Union Bank change in composition but not in amount. 
D) liabilities of the Fed change in composition but not in amount. 
E) liabilities of First Union decrease by $100,000.

Question 5

The Federal Reserve System is organized into ________ Federal Reserve districts.

Accepted Answer

A) 6 
B) 10 
C) 12 
D) 15 
E) 50 
A) 6 
B) 10 
C) 12 
D) 15 
E) 50

Question 6

"When the Fed makes an open market purchase of government securities,the quantity of money will eventually decrease by a fraction of the initial change in the monetary base." Is the previous statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is wrong on two counts.Fir

Question 7

The monetary base does NOT include which of the following items?
I.Federal Reserve notes
Ii.banks' reserves at the Federal Reserve
Iii.U.S.government securities owned by the Federal Reserve

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) both i and ii 
E) both ii and iii 
A) i only 
B) ii only 
C) iii only 
D) both i and ii 
E) both ii and iii

Question 8

Checkable deposits are money because

Accepted Answer

A) they are protected by the Federal Reserve. 
B) they are guaranteed by banks. 
C) checks bounce when there are not enough funds to cash them. 
D) they can be converted into currency on demand and are used directly as a means of payment. 
E) only banks and other financial institutions can offer them. 
A) they are protected by the Federal Reserve. 
B) they are guaranteed by banks. 
C) checks bounce when there are not enough funds to cash them. 
D) they can be converted into currency on demand and are used directly as a means of payment. 
E) only banks and other financial institutions can offer them.

Question 9

Suppose the desired reserve ratio is 10 percent.If the Commerce Bank has total deposits of $20,000,total assets of $10,000,and actual reserves of $8000,the amount of excess reserves is

Accepted Answer

A) $2,000. 
B) $6,000. 
C) $800. 
D) $100. 
E) $0. 
A) $2,000. 
B) $6,000. 
C) $800. 
D) $100. 
E) $0.

Question 10

What is a problem with barter that makes it so difficult to use?

Accepted Answer

A) Individuals have to produce something to trade with. 
B) Barter requires a double coincidence of wants. 
C) Barter is very efficient but illegal because it avoids taxation. 
D) Barter requires use of only fiat money. 
E) Barter omits the store of value role for money. 
A) Individuals have to produce something to trade with. 
B) Barter requires a double coincidence of wants. 
C) Barter is very efficient but illegal because it avoids taxation. 
D) Barter requires use of only fiat money. 
E) Barter omits the store of value role for money.

If the desired reserve ratio is 7 percent and a bank has $10,000 of deposits,then its desired reserves are

The monetary multiplier is 3 and the change in the monetary base is $100,000.How much will the quantity of money increase?

When we keep part of our wealth in a bank checking account,we are using money as a

If the Fed purchases securities in the amount of $100,000 from First Union Bank,then the

The Federal Reserve System is organized into ________ Federal Reserve districts.

"When the Fed makes an open market purchase of government securities,the quantity of money will eventually decrease by a fraction of the initial change in the monetary base." Is the previous statement correct or incorrect? Explain your answer.

The monetary base does NOT include which of the following items? I.Federal Reserve notes Ii.banks' reserves at the Federal Reserve Iii.U.S.government securities owned by the Federal Reserve

Checkable deposits are money because

Suppose the desired reserve ratio is 10 percent.If the Commerce Bank has total deposits of $20,000,total assets of $10,000,and actual reserves of $8000,the amount of excess reserves is

What is a problem with barter that makes it so difficult to use?

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 the desired reserve ratio is 7 percent and a bank has $10,000 of deposits,then its desired reserves are

The monetary multiplier is 3 and the change in the monetary base is $100,000.How much will the quantity of money increase?

When we keep part of our wealth in a bank checking account,we are using money as a

If the Fed purchases securities in the amount of $100,000 from First Union Bank,then the

The Federal Reserve System is organized into ________ Federal Reserve districts.

"When the Fed makes an open market purchase of government securities,the quantity of money will eventually decrease by a fraction of the initial change in the monetary base." Is the previous statement correct or incorrect? Explain your answer.

The monetary base does NOT include which of the following items? I.Federal Reserve notes Ii.banks' reserves at the Federal Reserve Iii.U.S.government securities owned by the Federal Reserve

Checkable deposits are money because

Suppose the desired reserve ratio is 10 percent.If the Commerce Bank has total deposits of $20,000,total assets of $10,000,and actual reserves of $8000,the amount of excess reserves is

What is a problem with barter that makes it so difficult to use?

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