Exam 32: Inflation and the Quantity Theory of Money

Suppose the economy is growing at a rate higher than the Solow growth rate. To bring the real growth rate back to the Solow growth rate, the Fed should

What are the three different tools that the Fed can use to increase the money supply? Briefly explain how they can affect the money supply.

An increase in money growth will cause inflation to increase in

The relationship between bond prices and interest rates is

The monetary base is equal to currency plus

The Federal Reserve acquires its unique power through its ability to issue money.

The money multiplier is greater than 1 because most banks keep more than 100 percent of any increase in bank deposits as reserves.

If the Fed wishes to implement a policy to influence aggregate demand, what are some of the important variables that it monitors and predicts in order to fine-tune its actions?

Moral hazard occurs when

If the required reserve ratio is 4 percent, the money multiplier is

M2 is included in M1.

Reserves held by banks are mainly held in the form of

Which of the following is an example of moral hazard?

Why are debit cards not listed as money?

Reference: Ref 15-3 (Table: Banking System) The banking system described in this table shows the positions held by four different banks. Which bank is liquid and insolvent?

Why does a one-dollar change in bank deposits cause a change in the money supply by more than one dollar?

In the United States, the largest category of means of payment is

Rank the major means of payment from the largest to the smallest amount of dollars.

Money is best defined as

What is the overnight lending rate from one bank to another?