Exam 24: The Aggregate Demandaggregate Supply Model

A bank has $100,000 in checkable deposits and $30,000 in reserves. If the required reserve ratio is 20%, what is the maximum amount of loans this bank can create?

Table 9-6: Deposit Expansion Stages In Table 9-6, assume that banks loan out 100% of their excess banking reserves, there are no cash withdrawals, and all loan proceeds are spent. Figures have been rounded up to the nearest whole number. -Refer to Table 9-6. What is the value of $G (the total new required reserves)?

Inmates at the federal penitentiary at Lompoc, California, accepted packages of mackerel in exchange for goods and services. Why were they willing to accept mackerel in exchange for goods and services?

Which of the following is a consequence of deposit insurance?

Any reserves that banks hold in excess of required reserves are called

The discount rate is the rate of interest charged when banks lend excess reserves to one another.

Inmates at the federal penitentiary at Lompoc, California, accepted packages of mackerel in exchange for goods and services. What function do these packages of mackerel perform?

The function of money illustrated by the prevailing prices of goods and services is the

If the reserve ratio is 10%, and banks do not hold excess reserves, when the Fed purchases $10 million of government bonds, bank reserves

The non-bank public chooses among various financial assets in deciding in what form it wants to hold liquidity. It thereby increases or decreases I. the M1 measure of money supply. II. the reserves of commercial banks. III. the reserves that commercial banks are required to hold.

If banks were required to keep 100% of deposits in reserves, they could

When a bank receives new deposits, it can make new loans up to the amount of

Which of the following is a store of value and a common medium of exchange?

When a member bank borrows reserves from the Fed,

Scenario 2: Fed sells bonds to Henry Hyde Consider a banking system in which the reserve requirement is 10%, banks try not to hold excess reserves, consumers and firms hold money only in the form of checking account balances, and all loan proceeds are spent. Suppose initially all banks in the system are loaned up. Now, suppose that the Fed sells a $50,000 bond to Henry Hyde, who pays for the bond by writing a check drawn against Jekyll Bank. -Refer to Scenario 2. Which of the following happens when Henry Hyde pays for the bond by writing a check from his checking account at the Jekyll Bank?

Table 9-2 -Refer to Table 9-2. In Year 2, the supply of money measured by M1 was

The federal funds rate is the interest rate the Fed charges to banks when it lends reserves to them.

Money that some authority has declared legal tender is called

Which of the following is not an example of a financial intermediary?

Which of the following statements is false about M1 and M2?