Question 1

All the following statements about the Federal Reserve are true EXCEPT the fact that it

Accepted Answer

A)  is a public authority. 
B)  regulates a nation's depository institutions. 
C)  accepts checking deposits from the nation's residents. 
D)  controls the quantity of money. 
A)  is a public authority. 
B)  regulates a nation's depository institutions. 
C)  accepts checking deposits from the nation's residents. 
D)  controls the quantity of money.

Question 2

In the quantity theory of money, the quantity of money is assumed to

Accepted Answer

A)  not influence the velocity of circulation. 
B)  rise during recessions. 
C)  fall during recessions. 
D)  be constant. 
A)  not influence the velocity of circulation. 
B)  rise during recessions. 
C)  fall during recessions. 
D)  be constant.

Question 3

According to the quantity theory of money, inflation causes an increase in the money supply.

Accepted Answer

A) True 
 B)False

Question 4

The sum of currency and reserves of depository institutions represents the

Accepted Answer

A)  reserves of the Fed. 
B)  assets of the Fed. 
C)  monetary base. 
D)  vault cash. 
A)  reserves of the Fed. 
B)  assets of the Fed. 
C)  monetary base. 
D)  vault cash.

Question 5

Reserves are

Accepted Answer

A)  gold in a bank's vault plus its gold at Federal Reserve banks. 
B)  cash in a bank's vault plus its deposits at Federal Reserve banks. 
C)  cash in a bank's vault plus its gold at Federal Reserve banks. 
D)  cash in a bank's vault plus the cash carried by its customers. 
A)  gold in a bank's vault plus its gold at Federal Reserve banks. 
B)  cash in a bank's vault plus its deposits at Federal Reserve banks. 
C)  cash in a bank's vault plus its gold at Federal Reserve banks. 
D)  cash in a bank's vault plus the cash carried by its customers.

Question 6

-In the figure above, if the interest rate is 4 percent, there is a $0.1 trillion excess

Accepted Answer

A)  quantity of money and bond prices will rise. 
B)  quantity of money and bond prices will fall. 
C)  demand for money and bond prices will fall. 
D)  demand for money and bond prices will rise. 
A)  quantity of money and bond prices will rise. 
B)  quantity of money and bond prices will fall. 
C)  demand for money and bond prices will fall. 
D)  demand for money and bond prices will rise.

Question 7

The main policy-making organization of the Federal Reserve System is the

Accepted Answer

A)  U.S. Mint. 
B)  U.S. Treasury. 
C)  Joint Congressional Committee on Monetary Policy. 
D)  Federal Open Market Committee. 
A)  U.S. Mint. 
B)  U.S. Treasury. 
C)  Joint Congressional Committee on Monetary Policy. 
D)  Federal Open Market Committee.

Question 8

-In the figure above, if the interest rate is 4 percent, there is a $0.1 trillion excess

Accepted Answer

A)  quantity of money and the interest rate will rise. 
B)  quantity of money and the interest rate will fall. 
C)  demand for money and the interest rate will fall. 
D)  demand for money and the interest rate will rise. 
A)  quantity of money and the interest rate will rise. 
B)  quantity of money and the interest rate will fall. 
C)  demand for money and the interest rate will fall. 
D)  demand for money and the interest rate will rise.

Question 9

Suppose that the money multiplier is 3. If the monetary base increases by $1 million, the quantity of money will

Accepted Answer

A)  increase by $3 million. 
B)  increase by $333,333. 
C)  decrease by $3 million. 
D)  decrease by $333,333. 
A)  increase by $3 million. 
B)  increase by $333,333. 
C)  decrease by $3 million. 
D)  decrease by $333,333.

Question 10

As a "central bank," which of the following is TRUE regarding the Fed?
I. The Fed is a public authority that regulates the nation's banks.
II. The Fed is not allowed to provide services to commercial banks like Citibank.
III. The Fed is required to provide banking services to private citizens.

Accepted Answer

A)  I only 
B)  II only 
C)  I and II 
D)  I and III 
A)  I only 
B)  II only 
C)  I and II 
D)  I and III

Question 11

The table below shows data for Indonesia.   Assuming the velocity of circulation did not change, the money growth rate in Indonesia was

Accepted Answer

A)  0.3 percent in 2009. 
B)  11.7 percent in 2010. 
C)  -0.3 percent in 2009. 
D)  5.7 percent in 2010. 
A)  0.3 percent in 2009. 
B)  11.7 percent in 2010. 
C)  -0.3 percent in 2009. 
D)  5.7 percent in 2010.

Question 12

The fact that using money avoids the double coincidence of wants necessary in a barter economy illustrates which function of money?

Accepted Answer

A)  medium of exchange 
B)  unit of account 
C)  store of value 
D)  source of liquidity 
A)  medium of exchange 
B)  unit of account 
C)  store of value 
D)  source of liquidity

Question 13

How would a widespread adoption of credit cards affect the demand for money and the demand for money curve?

Accepted Answer

The widespread adoption of cre

Question 14

In the short run, when the Fed increases the quantity of money

Accepted Answer

A)  bond prices rise and the interest rate falls. 
B)  bond prices fall and the interest rate rises. 
C)  the demand for money increases. 
D)  the supply of money curve shifts leftward. 
A)  bond prices rise and the interest rate falls. 
B)  bond prices fall and the interest rate rises. 
C)  the demand for money increases. 
D)  the supply of money curve shifts leftward.

Question 15

-In the above figure, if the interest rate is 4 percent, people

Accepted Answer

A)  sell bonds so as to convert them into money. 
B)  buy bonds so as to have a better store of value. 
C)  petition the Fed to tighten the quantity of money. 
D)  buy stocks, because stocks are more liquid than currency. 
A)  sell bonds so as to convert them into money. 
B)  buy bonds so as to have a better store of value. 
C)  petition the Fed to tighten the quantity of money. 
D)  buy stocks, because stocks are more liquid than currency.

Question 16

When the nominal interest rate rises, the

Accepted Answer

A)  quantity of money demanded decreases. 
B)  demand for money decreases. 
C)  demand for money increases. 
D)  quantity of money demanded increases. 
A)  quantity of money demanded decreases. 
B)  demand for money decreases. 
C)  demand for money increases. 
D)  quantity of money demanded increases.

Question 17

In October of 2015, the interest rate on money market accounts was about 0.2 percent. In 2007, the interest rate on money market accounts was about 4.0 percent. What has been the impact on the demand for money curve from this fall in the interest rate?

Accepted Answer

A)  the money demand curve shifted to the right 
B)  the money demand curve shifted to the left 
C)  there was a downward movement along the demand for money curve 
D)  there was an upward movement along the demand for money curve 
A)  the money demand curve shifted to the right 
B)  the money demand curve shifted to the left 
C)  there was a downward movement along the demand for money curve 
D)  there was an upward movement along the demand for money curve

Question 18

What is the interaction between the Federal Reserve districts and the Board of Governors of the Federal Reserve System?

Accepted Answer

The Federal Reserve System divides the n

Question 19

-Use the figure above to answer this question. Suppose the economy is operating at point a. A move to ________ could be explained by ________.

Accepted Answer

A)  point e; a decrease in the nominal interest rate 
B)  point c; an increase in the nominal interest rate 
C)  point d; an increase in real GDP 
D)  point b; an increase in real GDP 
A)  point e; a decrease in the nominal interest rate 
B)  point c; an increase in the nominal interest rate 
C)  point d; an increase in real GDP 
D)  point b; an increase in real GDP

Question 20

If the velocity of circulation is 6 and the quantity of money is $3 trillion, what is nominal GDP?

Accepted Answer

A)  $18 trillion 
B)  $6 trillion 
C)  $3 trillion 
D)  $333 billion 
A)  $18 trillion 
B)  $6 trillion 
C)  $3 trillion 
D)  $333 billion

All the following statements about the Federal Reserve are true EXCEPT the fact that it

In the quantity theory of money, the quantity of money is assumed to

According to the quantity theory of money, inflation causes an increase in the money supply.

The sum of currency and reserves of depository institutions represents the

Reserves are

-In the figure above, if the interest rate is 4 percent, there is a $0.1 trillion excess

The main policy-making organization of the Federal Reserve System is the

-In the figure above, if the interest rate is 4 percent, there is a $0.1 trillion excess

Suppose that the money multiplier is 3. If the monetary base increases by $1 million, the quantity of money will

As a "central bank," which of the following is TRUE regarding the Fed? I. The Fed is a public authority that regulates the nation's banks. II. The Fed is not allowed to provide services to commercial banks like Citibank. III. The Fed is required to provide banking services to private citizens.

The table below shows data for Indonesia. Assuming the velocity of circulation did not change, the money growth rate in Indonesia was

The fact that using money avoids the double coincidence of wants necessary in a barter economy illustrates which function of money?

How would a widespread adoption of credit cards affect the demand for money and the demand for money curve?

In the short run, when the Fed increases the quantity of money

-In the above figure, if the interest rate is 4 percent, people

When the nominal interest rate rises, the

In October of 2015, the interest rate on money market accounts was about 0.2 percent. In 2007, the interest rate on money market accounts was about 4.0 percent. What has been the impact on the demand for money curve from this fall in the interest rate?

What is the interaction between the Federal Reserve districts and the Board of Governors of the Federal Reserve System?

-Use the figure above to answer this question. Suppose the economy is operating at point a. A move to could be explained by .

If the velocity of circulation is 6 and the quantity of money is $3 trillion, what is nominal GDP?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 8: Money, the Price Level, and Inflation

All the following statements about the Federal Reserve are true EXCEPT the fact that it

In the quantity theory of money, the quantity of money is assumed to

According to the quantity theory of money, inflation causes an increase in the money supply.

The sum of currency and reserves of depository institutions represents the

Reserves are

-In the figure above, if the interest rate is 4 percent, there is a $0.1 trillion excess

The main policy-making organization of the Federal Reserve System is the

-In the figure above, if the interest rate is 4 percent, there is a $0.1 trillion excess

Suppose that the money multiplier is 3. If the monetary base increases by $1 million, the quantity of money will

As a "central bank," which of the following is TRUE regarding the Fed? I. The Fed is a public authority that regulates the nation's banks. II. The Fed is not allowed to provide services to commercial banks like Citibank. III. The Fed is required to provide banking services to private citizens.

The table below shows data for Indonesia. Assuming the velocity of circulation did not change, the money growth rate in Indonesia was

The fact that using money avoids the double coincidence of wants necessary in a barter economy illustrates which function of money?

How would a widespread adoption of credit cards affect the demand for money and the demand for money curve?

In the short run, when the Fed increases the quantity of money

-In the above figure, if the interest rate is 4 percent, people

When the nominal interest rate rises, the

In October of 2015, the interest rate on money market accounts was about 0.2 percent. In 2007, the interest rate on money market accounts was about 4.0 percent. What has been the impact on the demand for money curve from this fall in the interest rate?

What is the interaction between the Federal Reserve districts and the Board of Governors of the Federal Reserve System?

-Use the figure above to answer this question. Suppose the economy is operating at point a. A move to ________ could be explained by ________.

If the velocity of circulation is 6 and the quantity of money is $3 trillion, what is nominal GDP?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

-Use the figure above to answer this question. Suppose the economy is operating at point a. A move to could be explained by .