Exam 9: The Nature and Creation of Money

Which of the following is an example of a bank's assets?

In the banking system today, the reserves banks hold against their deposit liabilities must take one of two forms. They are

Freema withdraws $1,000 from her checking account to purchase a $1,000 time-deposit. As a result of her transaction,

Money is essentially defined by

The Fed can increase the federal funds rate by

Suppose the required reserve ratio is 10%. Mr. Normal uses his ATM card to withdraw $1,000 from this checking account in California National Bank. This action has

Debit cards are

The rate of interest charged for reserves in the federal funds market is the

What happens to the value of the deposit multiplier when banks hold excess reserves?

Which of the following items serve as a medium of exchange in the United States? I. $100 cash II. 50 euros III. the balance in your checking account IV. a $1,000 corporate stock that you own

Money that some authority has declared legal tender is called

The functions of money are

Use the following to answer questions . Exhibit: Fed Buys Bonds Scenario 1: Fed Buys Bonds from Sheila Jones 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 buys a $100,000 bond from Sheila Jones, who banks at the Perez Bank, and that she deposits her check in her checking account at Perez Bank. -(Exhibit: Fed Buys Bonds) Once the full impact of the Fed's open market purchase and Sheila's deposit worked its way through the banking system, what is the maximum change on the money supply as a result of these two events?

The Federal Reserve System is made up of twelve regional banks owned by

Money that some authority, generally a government, has ordered to be accepted as a medium of exchange is called _______ money.

Because commodity money is not uniform in quality, there is a tendency

A bank is "loaned up" when

Debit cards are the electronic equivalent of a check, but neither debit cards nor checks are money.

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

When the Fed purchases government bonds it _____ reserves and ____ the money supply.