Question 1

The voting members of the Federal Open Market Committee consists of the

Accepted Answer

A) seven Board of Governor members and the 12 Federal Reserve Bank presidents. 
B) seven Board of Governor members and five Federal Reserve Bank presidents. 
C) 12 Board of Governor members and the seven Federal Reserve Bank presidents. 
D) 12 Board of Governor members and the five Federal Reserve Bank presidents. 
E) six Board of Governor members and six Federal Reserve Bank presidents. 
A) seven Board of Governor members and the 12 Federal Reserve Bank presidents. 
B) seven Board of Governor members and five Federal Reserve Bank presidents. 
C) 12 Board of Governor members and the seven Federal Reserve Bank presidents. 
D) 12 Board of Governor members and the five Federal Reserve Bank presidents. 
E) six Board of Governor members and six Federal Reserve Bank presidents.

Question 2

The money multiplier is used to determine how much the

Accepted Answer

A) monetary base increases when the Fed purchases government securities. 
B) quantity of money increases when the monetary base increases. 
C) monetary base increases when the quantity of money increases. 
D) quantity of money increases when the required reserve ratio increases. 
E) monetary base increases when the Fed sells government securities. 
A) monetary base increases when the Fed purchases government securities. 
B) quantity of money increases when the monetary base increases. 
C) monetary base increases when the quantity of money increases. 
D) quantity of money increases when the required reserve ratio increases. 
E) monetary base increases when the Fed sells government securities.

Question 3

Regulating the amount of money in the United States is one of the most important responsibilities of the

Accepted Answer

A) State Department. 
B) state governments. 
C) Treasury Department. 
D) Federal Reserve. 
E) U.S.Mint. 
A) State Department. 
B) state governments. 
C) Treasury Department. 
D) Federal Reserve. 
E) U.S.Mint.

Question 4

A bank has $400 in checkable deposits,$800 in savings deposits,$700 in time deposits,$900 in loans to businesses,$300 in outstanding credit card balances,$500 in government securities,$10 in currency in its vault,and $20 in deposits at the Fed.The bank's deposits that are part of M1 are equal to

Accepted Answer

A) $1,900. 
B) $400. 
C) $1,210. 
D) $530. 
E) $410. 
A) $1,900. 
B) $400. 
C) $1,210. 
D) $530. 
E) $410.

Question 5

The monetary base is equal to

Accepted Answer

A) M1. 
B) M2. 
C) currency and coins in circulation plus checkable deposits. 
D) the sum of coins,Federal Reserve notes,and banks' reserves at the Fed. 
E) the sum of coins,Federal Reserve notes,and gold at the Fed. 
A) M1. 
B) M2. 
C) currency and coins in circulation plus checkable deposits. 
D) the sum of coins,Federal Reserve notes,and banks' reserves at the Fed. 
E) the sum of coins,Federal Reserve notes,and gold at the Fed.

Question 6

Banks can make loans up to an amount equal to their

Accepted Answer

A) total deposits. 
B) total reserves. 
C) required reserves. 
D) excess reserves. 
E) total government securities. 
A) total deposits. 
B) total reserves. 
C) required reserves. 
D) excess reserves. 
E) total government securities.

Question 7

For anything to be considered money it must be

Accepted Answer

A) a valuable commodity,such as gold. 
B) a token,such as a green piece of paper. 
C) either a commodity or a token,as long as it is generally accepted as a means of payment. 
D) a mystical token,such as whale teeth. 
E) used in barter transactions. 
A) a valuable commodity,such as gold. 
B) a token,such as a green piece of paper. 
C) either a commodity or a token,as long as it is generally accepted as a means of payment. 
D) a mystical token,such as whale teeth. 
E) used in barter transactions.

Question 8

An open market purchase of securities by the Fed leads to all of the following EXCEPT

Accepted Answer

A) an initial increase in excess reserves. 
B) an increase in bank lending. 
C) a decrease in the quantity of money. 
D) an increase in banks' reserves. 
E) an increase in the monetary base. 
A) an initial increase in excess reserves. 
B) an increase in bank lending. 
C) a decrease in the quantity of money. 
D) an increase in banks' reserves. 
E) an increase in the monetary base.

Question 9

If the Fed buys a $100,000 government security from a bank when the desired reserve ratio is 10 percent and the currency drain ratio is 50 percent,the bank can loan a maximum of

Accepted Answer

A) $50,000. 
B) $40,000. 
C) $100,000. 
D) $90,000. 
E) $60,000. 
A) $50,000. 
B) $40,000. 
C) $100,000. 
D) $90,000. 
E) $60,000.

Question 10

The Federal Open Market Committee is

Accepted Answer

A) the main policy-making body of the Fed. 
B) a seven-member board,each serving a 14-year term. 
C) comprised of the presidents of the 12 Federal Reserve Banks. 
D) another name for the Board of Governors. 
E) the government committee charged with determining income tax rates. 
A) the main policy-making body of the Fed. 
B) a seven-member board,each serving a 14-year term. 
C) comprised of the presidents of the 12 Federal Reserve Banks. 
D) another name for the Board of Governors. 
E) the government committee charged with determining income tax rates.

Question 11

Which of the following policy tools did the Fed create in 2008 to address the financial crisis?
I.quantitative easing
Ii.credit easing
Iii.open market operations

Accepted Answer

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

Question 12

-The above table gives assets and deposits for a (small)bank.The bank's deposits that are part of M2 are equal to

Accepted Answer

A) $600. 
B) $1600. 
C) $3,100. 
D) $30. 
E) $5,100. 
A) $600. 
B) $1600. 
C) $3,100. 
D) $30. 
E) $5,100.

Question 13

The Board of Governors of the Federal Reserve System has

Accepted Answer

A) seven members serving for 12-year terms. 
B) 12 members serving for seven-year terms. 
C) seven members serving for seven-year terms. 
D) seven members serving for 14-year terms. 
E) seven members serving life terms. 
A) seven members serving for 12-year terms. 
B) 12 members serving for seven-year terms. 
C) seven members serving for seven-year terms. 
D) seven members serving for 14-year terms. 
E) seven members serving life terms.

Question 14

Comparing the effect on the monetary base between an open market purchase of government securities from a bank and the same open market operation conducted with the general public,the monetary base

Accepted Answer

A) increases by a larger amount if the general public sells the securities than if a bank sells the securities. 
B) increases by a larger amount if a bank sells the securities than if the general public sells the securities. 
C) does not change if it is the general public that sells the securities. 
D) increases by the same amount if the general public sells the securities or if a bank sells the securities. 
E) decreases by the same amount if the general public sells the securities or if a bank sells the securities. 
A) increases by a larger amount if the general public sells the securities than if a bank sells the securities. 
B) increases by a larger amount if a bank sells the securities than if the general public sells the securities. 
C) does not change if it is the general public that sells the securities. 
D) increases by the same amount if the general public sells the securities or if a bank sells the securities. 
E) decreases by the same amount if the general public sells the securities or if a bank sells the securities.

Question 15

The Federal Reserve is the nation's central bank.Therefore,does it provide banking services to individual citizens?

Accepted Answer

No,because it is the nation's

Question 16

The Banks of the Mississippi has excess reserves of $20,000,desired reserves of $80,000 and the desired reserve ratio is 5 percent.What is the total amount of deposits in this bank?

Accepted Answer

A) $5,000 
B) $1,000,000 
C) $1,600,000 
D) $100,000 
E) $180,000 
A) $5,000 
B) $1,000,000 
C) $1,600,000 
D) $100,000 
E) $180,000

Question 17

Conducting the nation's monetary policy is the duty of the

Accepted Answer

A) Department of Commerce. 
B) U.S.Treasury department. 
C) Federal Reserve System. 
D) Federation of Banks. 
E) Federal Bank Supervisor. 
A) Department of Commerce. 
B) U.S.Treasury department. 
C) Federal Reserve System. 
D) Federation of Banks. 
E) Federal Bank Supervisor.

Question 18

A bank reports reserves of $500,000,physical capital of $200,000,loans of $1,000,000,deposits of $1,000,000,and owners' equity of $500,000.If the desired reserve ratio is 5 percent,the bank's desired reserves are

Accepted Answer

A) $10,000. 
B) $25,000. 
C) $50,000. 
D) $1,000,000. 
E) $500,000. 
A) $10,000. 
B) $25,000. 
C) $50,000. 
D) $1,000,000. 
E) $500,000.

Question 19

Who regulates the quantity of money circulating in the economy?

Accepted Answer

A) the Federal Reserve 
B) the banking system 
C) the U.S.Congress 
D) the President of the United States 
E) The U.S.Congress and the President share the control. 
A) the Federal Reserve 
B) the banking system 
C) the U.S.Congress 
D) the President of the United States 
E) The U.S.Congress and the President share the control.

Question 20

All of the following are financial institutions that accept deposits and make loans to people and businesses EXCEPT

Accepted Answer

A) commercial banks. 
B) savings and loans. 
C) credit unions. 
D) central banks. 
E) savings banks. 
A) commercial banks. 
B) savings and loans. 
C) credit unions. 
D) central banks. 
E) savings banks.

The voting members of the Federal Open Market Committee consists of the

The money multiplier is used to determine how much the

Regulating the amount of money in the United States is one of the most important responsibilities of the

A bank has $400 in checkable deposits,$800 in savings deposits,$700 in time deposits,$900 in loans to businesses,$300 in outstanding credit card balances,$500 in government securities,$10 in currency in its vault,and $20 in deposits at the Fed.The bank's deposits that are part of M1 are equal to

The monetary base is equal to

Banks can make loans up to an amount equal to their

For anything to be considered money it must be

An open market purchase of securities by the Fed leads to all of the following EXCEPT

If the Fed buys a $100,000 government security from a bank when the desired reserve ratio is 10 percent and the currency drain ratio is 50 percent,the bank can loan a maximum of

The Federal Open Market Committee is

Which of the following policy tools did the Fed create in 2008 to address the financial crisis? I.quantitative easing Ii.credit easing Iii.open market operations

-The above table gives assets and deposits for a (small)bank.The bank's deposits that are part of M2 are equal to

The Board of Governors of the Federal Reserve System has

Comparing the effect on the monetary base between an open market purchase of government securities from a bank and the same open market operation conducted with the general public,the monetary base

The Federal Reserve is the nation's central bank.Therefore,does it provide banking services to individual citizens?

The Banks of the Mississippi has excess reserves of $20,000,desired reserves of $80,000 and the desired reserve ratio is 5 percent.What is the total amount of deposits in this bank?

Conducting the nation's monetary policy is the duty of the

A bank reports reserves of $500,000,physical capital of $200,000,loans of $1,000,000,deposits of $1,000,000,and owners' equity of $500,000.If the desired reserve ratio is 5 percent,the bank's desired reserves are

Who regulates the quantity of money circulating in the economy?

All of the following are financial institutions that accept deposits and make loans to people and businesses EXCEPT

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

The voting members of the Federal Open Market Committee consists of the

The money multiplier is used to determine how much the

Regulating the amount of money in the United States is one of the most important responsibilities of the

A bank has $400 in checkable deposits,$800 in savings deposits,$700 in time deposits,$900 in loans to businesses,$300 in outstanding credit card balances,$500 in government securities,$10 in currency in its vault,and $20 in deposits at the Fed.The bank's deposits that are part of M1 are equal to

The monetary base is equal to

Banks can make loans up to an amount equal to their

For anything to be considered money it must be

An open market purchase of securities by the Fed leads to all of the following EXCEPT

If the Fed buys a $100,000 government security from a bank when the desired reserve ratio is 10 percent and the currency drain ratio is 50 percent,the bank can loan a maximum of

The Federal Open Market Committee is

Which of the following policy tools did the Fed create in 2008 to address the financial crisis? I.quantitative easing Ii.credit easing Iii.open market operations

-The above table gives assets and deposits for a (small)bank.The bank's deposits that are part of M2 are equal to

The Board of Governors of the Federal Reserve System has

Comparing the effect on the monetary base between an open market purchase of government securities from a bank and the same open market operation conducted with the general public,the monetary base

The Federal Reserve is the nation's central bank.Therefore,does it provide banking services to individual citizens?

The Banks of the Mississippi has excess reserves of $20,000,desired reserves of $80,000 and the desired reserve ratio is 5 percent.What is the total amount of deposits in this bank?

Conducting the nation's monetary policy is the duty of the

A bank reports reserves of $500,000,physical capital of $200,000,loans of $1,000,000,deposits of $1,000,000,and owners' equity of $500,000.If the desired reserve ratio is 5 percent,the bank's desired reserves are

Who regulates the quantity of money circulating in the economy?

All of the following are financial institutions that accept deposits and make loans to people and businesses EXCEPT

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