Exam 24: The Nature and Creation of Money

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?

Commodity money is paper currency that may be redeemed for a specific commodity at a specified rate on the currency.

Which of the following is a market in which banks lend reserves to one another?

Which of the following is included in M2 but not in M1?

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

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

Membership in the Federal Reserve System

M1 include

The money supply is the total amount of checkable deposits in the economy.

Which of the following is not a function of the Federal Reserve System?

Which organization is responsible for managing the nation's money supply?

The three main monetary policy instruments are

In a system with 100% reserve requirement, banks cannot create loans.

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

Which of the following are primary functions of a central bank? I.act as a regulator of banks II.issue government bonds III.set monetary policy IV.regulate dividend payments by corporations

The maximum amount of increase in the money supply that can be caused by an increase in excess reserves is equal to the

The Fed seldom uses the reserve requirement ratio to influence the money supply.What is the reason for this?

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

When you discover money in your coat that you placed there last winter, you unexpectedly find you were using money as a(n)

Credit cards are money since they facilitate the purchase of goods and services.