Exam 24: The Nature and Creation of Money

For a given level of reserves, a decrease in the reserve requirement ratio will

Assume that the required reserve ratio is 20%.What is the maximum increase in money supply for the banking system as a whole following a $10,000 increase in excess reserves?

The Federal Reserve System was established in 1913 in response to the

Which of the following is the most liquid asset?

Which of the following is part of M1? I.currency in a bank's vault II.cash in your purse III.checkable deposits IV.traveler's checks

If Naruz is in the car dealer's showroom looking at the sticker price on a 2009 car, that sticker price serves as a medium of exchange.

Assume that the required reserve ratio is 10%.An increase of $1,000 in the banking system's excess reserves may result in a total expansion of new deposits for the banking system as a whole by as much as

The law requires banks to maintain

The Federal Reserve does all of the following except

A bank's reserves are

Which of the following is an interest rate that is set directly by the Fed?

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

Credit cards are

When banks hold more reserves than are required, such reserves are called

One disadvantage of commodity money is that

The quantity of reserves that banks must hold against deposits is called

Which of the following items serve as a store of value? I.cash in your pocket II.the balance in your checking account III.an original Picasso painting IV.a $1,000 corporate bond

How does the Fed decide which monetary measure it should keep track of?

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

Fiat money is money that has a value apart from its use as money.