Exam 11: The Monetary System

The Banks of the Mississippi has excess reserves of $20,000, desired reserves of $80,000 and the desired reserve ratio is 5 percent. What are the total amount of deposits in this bank?

For anything to be considered money it must be

When people make deposits of currency into a bank, the quantity of M1

The process of money creation by the banking system is limited, in part, by the

The monetary base is equal to

The goal of a commercial bank is to

Required reserve ratios are the minimum amount of

Which statement most accurately captures the state of money today?

If the Fed increases the discount rate,

If the desired reserve ratio is 7 percent and a bank has $10,000 of deposits, then its desired reserves are

The amount of loans that a bank can create is limited by

When money is used to compare the relative price of a burrito and a taco, money is being used as a

The required reserve ratio is 20 percent and banks have no excess reserves. Katie deposits $300 in her bank. What are the bank's excess reserves immediately after Katie makes her deposit?

Suppose the currency drain ratio is 33.33 percent and the desired reserve ratio is 10 percent. The money multiplier equals

Which of the following are policy tools used by the Federal Reserve? I. the federal personal income tax Ii. open market operations Iii. changing the required reserve ratio

A commercial bank's reserves are equal to the amount of

If someone buries money in a tin can beneath a tree, the money is functioning as a

During the 2008 financial crisis, banks restricted_{--------------------}and the M2 money multiplier_{--------------------}

If Joe withdraws a $100 bill from his checking account and Jack deposits another $100 bill in his savings account, by how will M1 and M2 change?

Physical currency is_{--------------------}popular than e-cash,_{--------------------}