Question 1

Deposits held by commercial banks are insured by the:

Accepted Answer

A)  Federal Trade Commission. 
B)  Federal Deposit Insurance Corporation. 
C)  Federal Communications Commission. 
D)  Resolution Trust Corporation. 
A)  Federal Trade Commission. 
B)  Federal Deposit Insurance Corporation. 
C)  Federal Communications Commission. 
D)  Resolution Trust Corporation.

Question 2

Expansionary monetary policy decreases the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 3

A subway token does not fulfill the three functions of money.

Accepted Answer

A) True 
 B)False

Question 4

The banking system in the U.S. is based on:

Accepted Answer

A)  100 percent reserve banking. 
B)  fractional reserve banking. 
C)  0 percent reserve banking. 
D)  none of the above. 
A)  100 percent reserve banking. 
B)  fractional reserve banking. 
C)  0 percent reserve banking. 
D)  none of the above.

Question 5

An increase 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 6

You are given the following information on the banking system.
Reserve requirement rr = 0.08 Currency-deposit ratio c = 0.10 Excess reserve ratio e = 0.05
Compute the simple deposit and money multipliers.

Accepted Answer

Simple dep

Question 7

Open market purchase of government securities by the Fed increases the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 8

The simple deposit multiplier is larger than the money multiplier.

Accepted Answer

A) True 
 B)False

Question 9

Define the three functions of money.

Accepted Answer

The medium of exchange enables one to un

Question 10

If $1000 was deposited in a bank and the reserve requirement is 0.20, how much is available for loans?

Accepted Answer

A)  $900 
B)  $910 
C)  $800 
D)  $930 
A)  $900 
B)  $910 
C)  $800 
D)  $930

Question 11

The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is 0.08. The excess reserve ratio, e, is 0.05. What is the size of the money multiplier?

Accepted Answer

A)  4.70 
B)  4.78 
C)  4.75 
D)  4.00 
A)  4.70 
B)  4.78 
C)  4.75 
D)  4.00

Question 12

Open market sale of government securities results in:

Accepted Answer

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

Question 13

The equilibrium price in the money market is the:

Accepted Answer

A)  inflation rate. 
B)  exchange rate. 
C)  interest rate. 
D)  none of the above. 
A)  inflation rate. 
B)  exchange rate. 
C)  interest rate. 
D)  none of the above.

Question 14

The money supply 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 barter system requires the double coincidence of wants to be fulfilled.

Accepted Answer

A) True 
 B)False

Question 16

The opportunity cost of hold real money balances is the:

Accepted Answer

A)  interest rate. 
B)  price level. 
C)  all of the above. 
D)  none of the above. 
A)  interest rate. 
B)  price level. 
C)  all of the above. 
D)  none of the above.

Question 17

There are voting members on the FOMC.

Accepted Answer

A)  4 
B)  7 
C)  12 
D)  15 
A)  4 
B)  7 
C)  12 
D)  15

Question 18

The interest rate the Federal Reserve charges banks which borrow reserves at the Federal Reserve's discount window is called the:

Accepted Answer

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

Question 19

A decrease in the real money supply can result from:

Accepted Answer

A)  increase in the nominal money supply or an increase in the price level. 
B)  increase in the nominal money supply or a decrease in the price level. 
C)  decrease in the nominal money supply or an increase in the price level. 
D)  decrease in the nominal money supply or a decrease in the price level. 
A)  increase in the nominal money supply or an increase in the price level. 
B)  increase in the nominal money supply or a decrease in the price level. 
C)  decrease in the nominal money supply or an increase in the price level. 
D)  decrease in the nominal money supply or a decrease in the price level.

Question 20

Expansionary monetary policy is achieved by:

Accepted Answer

A)  decreasing the amount of bank reserves and lowering the federal funds rate. 
B)  decreasing the amount of bank reserves and raising the federal funds rate. 
C)  increasing the amount of bank reserves and lowering the federal funds rate. 
D)  increasing the amount of bank reserves and raising the federal funds rate. 
A)  decreasing the amount of bank reserves and lowering the federal funds rate. 
B)  decreasing the amount of bank reserves and raising the federal funds rate. 
C)  increasing the amount of bank reserves and lowering the federal funds rate. 
D)  increasing the amount of bank reserves and raising the federal funds rate.

Deposits held by commercial banks are insured by the:

Expansionary monetary policy decreases the federal funds rate.

A subway token does not fulfill the three functions of money.

The banking system in the U.S. is based on:

An increase in the discount rate would:

You are given the following information on the banking system. Reserve requirement rr = 0.08 Currency-deposit ratio c = 0.10 Excess reserve ratio e = 0.05 Compute the simple deposit and money multipliers.

Open market purchase of government securities by the Fed increases the federal funds rate.

The simple deposit multiplier is larger than the money multiplier.

Define the three functions of money.

If $1000 was deposited in a bank and the reserve requirement is 0.20, how much is available for loans?

The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is 0.08. The excess reserve ratio, e, is 0.05. What is the size of the money multiplier?

Open market sale of government securities results in:

The equilibrium price in the money market is the:

The money supply consists of:

The barter system requires the double coincidence of wants to be fulfilled.

The opportunity cost of hold real money balances is the:

There are voting members on the FOMC.

The interest rate the Federal Reserve charges banks which borrow reserves at the Federal Reserve's discount window is called the:

A decrease in the real money supply can result from:

Expansionary monetary policy is achieved by:

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

Deposits held by commercial banks are insured by the:

Expansionary monetary policy decreases the federal funds rate.

A subway token does not fulfill the three functions of money.

The banking system in the U.S. is based on:

An increase in the discount rate would:

You are given the following information on the banking system. Reserve requirement rr = 0.08 Currency-deposit ratio c = 0.10 Excess reserve ratio e = 0.05 Compute the simple deposit and money multipliers.

Open market purchase of government securities by the Fed increases the federal funds rate.

The simple deposit multiplier is larger than the money multiplier.

Define the three functions of money.

If $1000 was deposited in a bank and the reserve requirement is 0.20, how much is available for loans?

The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is 0.08. The excess reserve ratio, e, is 0.05. What is the size of the money multiplier?

Open market sale of government securities results in:

The equilibrium price in the money market is the:

The money supply consists of:

The barter system requires the double coincidence of wants to be fulfilled.

The opportunity cost of hold real money balances is the:

There are voting members on the FOMC.

The interest rate the Federal Reserve charges banks which borrow reserves at the Federal Reserve's discount window is called the:

A decrease in the real money supply can result from:

Expansionary monetary policy is achieved by:

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