Question 1

If the Federal Reserve lowers the required reserve ratio,people will end up taking out ________ because the interest rates ________.

Accepted Answer

A) fewer loans;will rise 
B) more loans;will fall 
C) the same number of loans;will not change 
D) more loans;will rise 
E) fewer loans;are controlled by the economic conditions alone 
A) fewer loans;will rise 
B) more loans;will fall 
C) the same number of loans;will not change 
D) more loans;will rise 
E) fewer loans;are controlled by the economic conditions alone

Question 2

Define money and list its functions.

Accepted Answer

Money is any commodity or toke

Question 3

If you have assets that include $50 in cash,a checking account with $135,a savings account with $500,and a jar of coins for laundry of $15.75,how much M1 do you have?

Accepted Answer

You have $200.75 of M1,compris

Question 4

Which of the following are included in the M2 definition of money?

Accepted Answer

A) currency outside of banks and checkable deposits 
B) currency outside of banks and credit lines on credit cards 
C) time deposits and the value of prime grade bonds 
D) currency both inside and outside of banks 
E) currency inside of banks and banks' reserves 
A) currency outside of banks and checkable deposits 
B) currency outside of banks and credit lines on credit cards 
C) time deposits and the value of prime grade bonds 
D) currency both inside and outside of banks 
E) currency inside of banks and banks' reserves

Question 5

As a result of the Fed's actions during the 2008 financial crisis and banks' lending policies,the money multiplier ________ as a direct result of the ________.

Accepted Answer

A) fell from about 9 to about 4;surge in banks' desired reserve ratios as they took on less risk 
B) rose from about 4 to about 9;surge in banks' desired reserve ratios as they took on less risk 
C) fell from about 9 to about 4;low risk experienced by banks because of the FDIC increasing their default coverage amounts 
D) rose drastically;consistent decrease in banks' desired reserve ratios as they took on less risk 
E) decreased drastically;consistent decrease in banks' desired reserve ratios as they took on less risk 
A) fell from about 9 to about 4;surge in banks' desired reserve ratios as they took on less risk 
B) rose from about 4 to about 9;surge in banks' desired reserve ratios as they took on less risk 
C) fell from about 9 to about 4;low risk experienced by banks because of the FDIC increasing their default coverage amounts 
D) rose drastically;consistent decrease in banks' desired reserve ratios as they took on less risk 
E) decreased drastically;consistent decrease in banks' desired reserve ratios as they took on less risk

Question 6

________ in the currency drain ratio and ________ in the desired reserve ratio ________ the money multiplier.

Accepted Answer

A) An increase;an increase;increase 
B) An increase;a decrease;decrease 
C) A decrease;an increase;decrease 
D) A decrease;a decrease;increase 
E) An increase;a decrease;increase 
A) An increase;an increase;increase 
B) An increase;a decrease;decrease 
C) A decrease;an increase;decrease 
D) A decrease;a decrease;increase 
E) An increase;a decrease;increase

Question 7

In order to influence the interest rate,the Federal Reserve System can immediately adjust the

Accepted Answer

A) reserves of the banking system. 
B) inflation level. 
C) unemployment rate. 
D) taxes that citizens must pay. 
E) amount the government borrows. 
A) reserves of the banking system. 
B) inflation level. 
C) unemployment rate. 
D) taxes that citizens must pay. 
E) amount the government borrows.

Question 8

Which of the following best describes a double coincidence of wants?

Accepted Answer

A) Two buyers want the same good. 
B) Neither buyer wants a good. 
C) You have what another wants and you want what they have. 
D) A buyer and a seller rather than two buyers or two sellers must meet. 
E) None of the above answers is correct. 
A) Two buyers want the same good. 
B) Neither buyer wants a good. 
C) You have what another wants and you want what they have. 
D) A buyer and a seller rather than two buyers or two sellers must meet. 
E) None of the above answers is correct.

Question 9

A commercial bank's reserves are

Accepted Answer

A) bonds issued by the U.S.government that are very safe. 
B) the provision of funds to businesses and individuals. 
C) currency in its vault plus the balance on its reserve account at a Federal Reserve Bank. 
D) savings and time deposits. 
E) its loans. 
A) bonds issued by the U.S.government that are very safe. 
B) the provision of funds to businesses and individuals. 
C) currency in its vault plus the balance on its reserve account at a Federal Reserve Bank. 
D) savings and time deposits. 
E) its loans.

Question 10

Keeping $20 in currency to be able to buy gasoline,money is performing which function?

Accepted Answer

A) medium of exchange 
B) unit of account 
C) store of value 
D) barter mechanism 
E) symbol of fiat 
A) medium of exchange 
B) unit of account 
C) store of value 
D) barter mechanism 
E) symbol of fiat

Question 11

A new bank has reserves of $600,000,checkable deposits of $500,000,and government securities of $100,000.If the desired reserve ratio is 10 percent,the amount of loans this bank can make is

Accepted Answer

A) $50,000. 
B) $60,000. 
C) $540,000. 
D) $550,000. 
E) $600,000. 
A) $50,000. 
B) $60,000. 
C) $540,000. 
D) $550,000. 
E) $600,000.

Question 12

A debit card is

Accepted Answer

A) money because it is a means of payment. 
B) not money but is used to transfer bank deposits which are money. 
C) money because it is generally accepted as a means of payment. 
D) not money because it is not officially issued by the government. 
E) part of the M2 money supply but not part of the M1 money supply. 
A) money because it is a means of payment. 
B) not money but is used to transfer bank deposits which are money. 
C) money because it is generally accepted as a means of payment. 
D) not money because it is not officially issued by the government. 
E) part of the M2 money supply but not part of the M1 money supply.

Question 13

The Federal Open Market Committee consists of

Accepted Answer

A) 12 members,all of whom are the presidents of Federal Reserve Banks. 
B) 12 members,seven of whom are the members of the Board of Governors,four of whom are presidents of Federal Reserve Banks,and the president of the United States. 
C) 12 members,seven of whom are the members of the Board of Governors and five of whom are presidents of Federal Reserve Banks. 
D) 12 committees,all serving on the Board of Governors. 
E) 12 members,split evenly so that six of whom are members of the Board of Governors and six of whom are presidents of Federal Reserve Banks. 
A) 12 members,all of whom are the presidents of Federal Reserve Banks. 
B) 12 members,seven of whom are the members of the Board of Governors,four of whom are presidents of Federal Reserve Banks,and the president of the United States. 
C) 12 members,seven of whom are the members of the Board of Governors and five of whom are presidents of Federal Reserve Banks. 
D) 12 committees,all serving on the Board of Governors. 
E) 12 members,split evenly so that six of whom are members of the Board of Governors and six of whom are presidents of Federal Reserve Banks.

Question 14

________ the quantity of money in the United States.

Accepted Answer

A) The State Department regulates 
B) The Department of Treasury regulates 
C) The Federal Reserve System regulates 
D) Commercial banks regulate 
E) The President of the United States regulates 
A) The State Department regulates 
B) The Department of Treasury regulates 
C) The Federal Reserve System regulates 
D) Commercial banks regulate 
E) The President of the United States regulates

Question 15

"Because monetary policy must be approved by the president of the United States,the president is chair of the Federal Open Market Committee." Analyze the previous statement-is it correct or incorrect?

Accepted Answer

The statement is incorrect on several di

Question 16

If Bulge Bank has a desired reserve ratio of 10 percent,loans of $25,000,deposits of $100,000,vault cash of $10,000,and reserves at the Fed of $65,000,then the bank

Accepted Answer

A) has no remaining capacity to make loans. 
B) does not have enough reserves to meet its requirement. 
C) has excess reserves of $65,000. 
D) has excess reserves of $55,000. 
E) has excess reserves of $75,000. 
A) has no remaining capacity to make loans. 
B) does not have enough reserves to meet its requirement. 
C) has excess reserves of $65,000. 
D) has excess reserves of $55,000. 
E) has excess reserves of $75,000.

Question 17

Are credit cards or debit cards money? Explain your answer.

Accepted Answer

Neither credit cards nor debit cards are

Question 18

If someone buries money in a tin can beneath a tree,the money is functioning as a

Accepted Answer

A) medium of exchange. 
B) unit of account. 
C) means of payment. 
D) store of value. 
E) bartering tool. 
A) medium of exchange. 
B) unit of account. 
C) means of payment. 
D) store of value. 
E) bartering tool.

Question 19

"A bank can only use its excess reserves to make loans,while required reserves can only be used to buy U.S.government securities." Explain whether the previous statement is correct or incorrect.

Accepted Answer

The statement is incorrect on two dimens

Question 20

The required reserve ratio is 20 percent and banks have no excess reserves.Katie deposits $300 in her bank.What are the bank's excess reserves immediately after Katie makes her deposit?

Accepted Answer

A) $30 
B) $90 
C) $240 
D) $60 
E) $300 
A) $30 
B) $90 
C) $240 
D) $60 
E) $300

If the Federal Reserve lowers the required reserve ratio,people will end up taking out because the interest rates .

Define money and list its functions.

If you have assets that include $50 in cash,a checking account with $135,a savings account with $500,and a jar of coins for laundry of $15.75,how much M1 do you have?

Which of the following are included in the M2 definition of money?

As a result of the Fed's actions during the 2008 financial crisis and banks' lending policies,the money multiplier as a direct result of the .

in the currency drain ratio and in the desired reserve ratio the money multiplier.

In order to influence the interest rate,the Federal Reserve System can immediately adjust the

Which of the following best describes a double coincidence of wants?

A commercial bank's reserves are

Keeping $20 in currency to be able to buy gasoline,money is performing which function?

A new bank has reserves of $600,000,checkable deposits of $500,000,and government securities of $100,000.If the desired reserve ratio is 10 percent,the amount of loans this bank can make is

A debit card is

The Federal Open Market Committee consists of

________ the quantity of money in the United States.

"Because monetary policy must be approved by the president of the United States,the president is chair of the Federal Open Market Committee." Analyze the previous statement-is it correct or incorrect?

If Bulge Bank has a desired reserve ratio of 10 percent,loans of $25,000,deposits of $100,000,vault cash of $10,000,and reserves at the Fed of $65,000,then the bank

Are credit cards or debit cards money? Explain your answer.

If someone buries money in a tin can beneath a tree,the money is functioning as a

"A bank can only use its excess reserves to make loans,while required reserves can only be used to buy U.S.government securities." Explain whether the previous statement is correct or incorrect.

The required reserve ratio is 20 percent and banks have no excess reserves.Katie deposits $300 in her bank.What are the bank's excess reserves immediately after Katie makes her deposit?

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 Federal Reserve lowers the required reserve ratio,people will end up taking out ________ because the interest rates ________.

Define money and list its functions.

If you have assets that include $50 in cash,a checking account with $135,a savings account with $500,and a jar of coins for laundry of $15.75,how much M1 do you have?

Which of the following are included in the M2 definition of money?

As a result of the Fed's actions during the 2008 financial crisis and banks' lending policies,the money multiplier ________ as a direct result of the ________.

________ in the currency drain ratio and ________ in the desired reserve ratio ________ the money multiplier.

In order to influence the interest rate,the Federal Reserve System can immediately adjust the

Which of the following best describes a double coincidence of wants?

A commercial bank's reserves are

Keeping $20 in currency to be able to buy gasoline,money is performing which function?

A new bank has reserves of $600,000,checkable deposits of $500,000,and government securities of $100,000.If the desired reserve ratio is 10 percent,the amount of loans this bank can make is

A debit card is

The Federal Open Market Committee consists of

________ the quantity of money in the United States.

"Because monetary policy must be approved by the president of the United States,the president is chair of the Federal Open Market Committee." Analyze the previous statement-is it correct or incorrect?

If Bulge Bank has a desired reserve ratio of 10 percent,loans of $25,000,deposits of $100,000,vault cash of $10,000,and reserves at the Fed of $65,000,then the bank

Are credit cards or debit cards money? Explain your answer.

If someone buries money in a tin can beneath a tree,the money is functioning as a

"A bank can only use its excess reserves to make loans,while required reserves can only be used to buy U.S.government securities." Explain whether the previous statement is correct or incorrect.

The required reserve ratio is 20 percent and banks have no excess reserves.Katie deposits $300 in her bank.What are the bank's excess reserves immediately after Katie makes her deposit?

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

If the Federal Reserve lowers the required reserve ratio,people will end up taking out because the interest rates .

As a result of the Fed's actions during the 2008 financial crisis and banks' lending policies,the money multiplier as a direct result of the .

in the currency drain ratio and in the desired reserve ratio the money multiplier.