Exam 8: Money, the Price Level, and Inflation

In August 2017, Sun Trust Bank has $83 million in loans and $114 million in M1 deposits. If Sun Trust is holding $4 million in reserves, the bank's reserve ratio is

According to the quantity theory of money, a 15 percent increase in the quantity of money creates a 15 percent rise in

The risk of making a loan is

Which of the following is NOT a monetary policy tool?

Checking deposits at banks are

-The above table gives the initial balance sheet for Mini Bank. If the bank's desired reserve ratio is 10 percent, how much does this bank have in unplanned reserves?

A highly liquid asset

When the Fed sells government securities to a bank, how are the Fed's assets affected?

Which of the following is the most liquid?

An open market operation involves

"A bank can only use its unplanned reserves to make loans, while required reserves can only be used to buy U.S. government securities." Explain whether the previous statement is correct or incorrect.

Which of the following applies to an object serving as a store of value? I. If an object can be held and exchanged later for a good or service, it serves as a store of value. II. The less stable an object's value is, the better it serves as a store of value. III. A work of art can serve as a store of value.

-In the figure above, if the interest rate is 8 percent, people demand $0.1 trillion

The table below shows data for Japan. Assuming the velocity of circulation did not change, real GDP

The table below shows data (in millions) for Sun Trust Banks in September 2017 and September 2018. Suppose that the desired reserve ratio is 3 percent. The data show that Sun Trust ________ make more loans in 2017 and ________ make more loans in 2018.

The demand for money is ________ related to the nominal interest rate.

An open market operation occurs when ________ buys or sells securities ________.

The velocity of circulation is

M1 includes

The equation of exchange becomes the same as the quantity theory of money by assuming that the velocity of circulation ________ when the quantity of money changes and potential GDP ________ when the quantity of money changes.