Question 1

The private financial market where banks borrow and loan reserves to meet the minimum research requirements is called:

Accepted Answer

A)  federal funds market. 
B)  loanable funds market. 
C)  discount loans market. 
D)  repo market. 
A)  federal funds market. 
B)  loanable funds market. 
C)  discount loans market. 
D)  repo market.

Question 2

A decrease in the discount rate would:

Accepted Answer

A)  decrease bank borrowing of reserves and reflect an expansionary monetary policy. 
B)  decrease bank borrowing of reserves and reflect a contractionary monetary policy. 
C)  increase bank borrowing of reserves and reflect an expansionary monetary policy. 
D)  increase bank borrowing of reserves and reflect a contractionary monetary policy. 
A)  decrease bank borrowing of reserves and reflect an expansionary monetary policy. 
B)  decrease bank borrowing of reserves and reflect a contractionary monetary policy. 
C)  increase bank borrowing of reserves and reflect an expansionary monetary policy. 
D)  increase bank borrowing of reserves and reflect a contractionary monetary policy.

Question 3

Open market operations are an appropriate tool for day-to-day changes in monetary policy.

Accepted Answer

A) True 
 B)False

Question 4

The interest rate that banks charge on loans to their best customers is called the:

Accepted Answer

A)  federal funds rate. 
B)  discount rate. 
C)  mortgage interest rate. 
D)  prime rate. 
A)  federal funds rate. 
B)  discount rate. 
C)  mortgage interest rate. 
D)  prime rate.

Question 5

You are given the following information on the banking system.
Reserve requirement rr = 1.00 Currency-deposit ratio c = 0.10 Excess reserve ratio e = 0.00
Compute the simple deposit and money multipliers.

Accepted Answer

Simple dep

Question 6

There are 15 Federal Reserve District Banks.

Accepted Answer

A) True 
 B)False

Question 7

The store of value does not require that money hold its value of time in terms of its purchasing power.

Accepted Answer

A) True 
 B)False

Question 8

The least liquid form of money is:

Accepted Answer

A)  M1. 
B)  M2. 
C)  M3. 
D)  L. 
A)  M1. 
B)  M2. 
C)  M3. 
D)  L.

Question 9

The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is 0.07. The excess reserve ratio, e, is 0.10. What is the size of the money multiplier?

Accepted Answer

A)  4.70 
B)  4.07 
C)  4.75 
D)  4.00 
A)  4.70 
B)  4.07 
C)  4.75 
D)  4.00

Question 10

In the context of the money market, graphically illustrate and explain the impact of an increase in the use of ATM machines on interest rates.

Accepted Answer

An increase in ATM machines would decrea

Question 11

The Resolution Trust Corporation insures bank deposits.

Accepted Answer

A) True 
 B)False

Question 12

The central bank of the United States is the:

Accepted Answer

A)  First American Bank. 
B)  Federal Reserve. 
C)  Federal Deposit Insurance Corporation. 
D)  U.S. Treasury. 
A)  First American Bank. 
B)  Federal Reserve. 
C)  Federal Deposit Insurance Corporation. 
D)  U.S. Treasury.

Question 13

Open market purchase of government securities results in:

Accepted Answer

A)  an increase in bank reserves. 
B)  a decrease in bank reserves. 
C)  an increase in interest rates. 
D)  none of the above. 
A)  an increase in bank reserves. 
B)  a decrease in bank reserves. 
C)  an increase in interest rates. 
D)  none of the above.

Question 14

The monetary base consists of:

Accepted Answer

A)  currency plus reserves. 
B)  currency plus required reserves. 
C)  currency plus excess reserves. 
D)  currency plus demand deposits. 
A)  currency plus reserves. 
B)  currency plus required reserves. 
C)  currency plus excess reserves. 
D)  currency plus demand deposits.

Question 15

The reserve requirement is 0.10. What is the simple deposit multiplier?

Accepted Answer

A)  2 
B)  20 
C)  0.2 
D)  10 
A)  2 
B)  20 
C)  0.2 
D)  10

Question 16

Contractionary monetary policy increases the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 17

The primary responsibility of conducting monetary policy rests with the:

Accepted Answer

A)  Board of Governors. 
B)  Federal Open Market Committee. 
C)  Federal Deposit Insurance Corporation. 
D)  U.S. Treasury. 
A)  Board of Governors. 
B)  Federal Open Market Committee. 
C)  Federal Deposit Insurance Corporation. 
D)  U.S. Treasury.

Question 18

Banks with excess reserves will supply more reserves to the federal funds market as the interest rate increases.

Accepted Answer

A) True 
 B)False

Question 19

If $1000 was deposited in a bank and the reserve requirement is 0.10, how much is available for loans?

Accepted Answer

A)  $900 
B)  $910 
C)  $920 
D)  $930 
A)  $900 
B)  $910 
C)  $920 
D)  $930

Question 20

During the 1920s, the discount rate was the major policy tool of the Federal Reserve.

Accepted Answer

A) True 
 B)False

The private financial market where banks borrow and loan reserves to meet the minimum research requirements is called:

A decrease in the discount rate would:

Open market operations are an appropriate tool for day-to-day changes in monetary policy.

The interest rate that banks charge on loans to their best customers is called the:

You are given the following information on the banking system. Reserve requirement rr = 1.00 Currency-deposit ratio c = 0.10 Excess reserve ratio e = 0.00 Compute the simple deposit and money multipliers.

There are 15 Federal Reserve District Banks.

The store of value does not require that money hold its value of time in terms of its purchasing power.

The least liquid form of money is:

The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is 0.07. The excess reserve ratio, e, is 0.10. What is the size of the money multiplier?

In the context of the money market, graphically illustrate and explain the impact of an increase in the use of ATM machines on interest rates.

The Resolution Trust Corporation insures bank deposits.

The central bank of the United States is the:

Open market purchase of government securities results in:

The monetary base consists of:

The reserve requirement is 0.10. What is the simple deposit multiplier?

Contractionary monetary policy increases the federal funds rate.

The primary responsibility of conducting monetary policy rests with the:

Banks with excess reserves will supply more reserves to the federal funds market as the interest rate increases.

If $1000 was deposited in a bank and the reserve requirement is 0.10, how much is available for loans?

During the 1920s, the discount rate was the major policy tool of the Federal Reserve.

Managers and Economics

Demand, Supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, Firms, and Governments on Real Goods and Services

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

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Exam 13: The Role of Money in the Macro Economy

The private financial market where banks borrow and loan reserves to meet the minimum research requirements is called:

A decrease in the discount rate would:

Open market operations are an appropriate tool for day-to-day changes in monetary policy.

The interest rate that banks charge on loans to their best customers is called the:

You are given the following information on the banking system. Reserve requirement rr = 1.00 Currency-deposit ratio c = 0.10 Excess reserve ratio e = 0.00 Compute the simple deposit and money multipliers.

There are 15 Federal Reserve District Banks.

The store of value does not require that money hold its value of time in terms of its purchasing power.

The least liquid form of money is:

The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is 0.07. The excess reserve ratio, e, is 0.10. What is the size of the money multiplier?

In the context of the money market, graphically illustrate and explain the impact of an increase in the use of ATM machines on interest rates.

The Resolution Trust Corporation insures bank deposits.

The central bank of the United States is the:

Open market purchase of government securities results in:

The monetary base consists of:

The reserve requirement is 0.10. What is the simple deposit multiplier?

Contractionary monetary policy increases the federal funds rate.

The primary responsibility of conducting monetary policy rests with the:

Banks with excess reserves will supply more reserves to the federal funds market as the interest rate increases.

If $1000 was deposited in a bank and the reserve requirement is 0.10, how much is available for loans?

During the 1920s, the discount rate was the major policy tool of the Federal Reserve.

Managers and Economics

Demand, Supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, Firms, and Governments on Real Goods and Services

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

Filters