Question 1

If currency is $50 billion, chequable deposits $700 billion, other minor, less liquid categories $300 billion, and credit card debt $500 billion, how much is M1+?

Accepted Answer

A)  $750 billion 
B)  $1000 billion 
C)  $1050 billion 
D)  $1550 billion 
A)  $750 billion 
B)  $1000 billion 
C)  $1050 billion 
D)  $1550 billion

Question 2

If banks decide to hold a smaller part of their deposits as excess reserves, the money supply will fall, other things equal.

Accepted Answer

A) True 
 B)False

Question 3

What does the text mean by, and how does it answer the question, "Where is all the currency?"

Accepted Answer

The amount of currency per person is abo

Question 4

Which statement best describes the outcomes of a decrease in the reserve requirement in a fractional reserve system?

Accepted Answer

A)  Both the money multiplier and the money supply increase. 
B)  Both the money multiplier and the money supply decrease. 
C)  The money multiplier increases, but the money supply decreases. 
D)  The money multiplier decreases, but the money supply increases. 
A)  Both the money multiplier and the money supply increase. 
B)  Both the money multiplier and the money supply decrease. 
C)  The money multiplier increases, but the money supply decreases. 
D)  The money multiplier decreases, but the money supply increases.

Question 5

Assume that banks do not hold excess reserves. The banking system has $50 million in reserves and has a reserve requirement of 10 percent. The public holds $20 million in currency. Then the public decides to withdraw $5 million in currency from the banking system. If the Bank of Canada wants to keep the money supply stable by changing the reserve requirement, then what will the new reserve requirement be?

Accepted Answer

A)  8.1 percent 
B)  9.1 percent 
C)  9.7 percent 
D)  10 percent 
A)  8.1 percent 
B)  9.1 percent 
C)  9.7 percent 
D)  10 percent

Question 6

Which statement best explains whether bank runs are a problem for the economy?

Accepted Answer

A)  They are not a problem because bank runs will affect neither the money supply nor the money multiplier. 
B)  Bank runs are only a problem for insolvent banks. 
C)  They are a problem, but they can be neither prevented nor stopped by a central bank. 
D)  Bank runs are a problem because bank failures may spread to healthy banks. 
A)  They are not a problem because bank runs will affect neither the money supply nor the money multiplier. 
B)  Bank runs are only a problem for insolvent banks. 
C)  They are a problem, but they can be neither prevented nor stopped by a central bank. 
D)  Bank runs are a problem because bank failures may spread to healthy banks.

Question 7

A bank has (in millions): $200 reserves, $800 loans, $400 securities, $1000 deposits, and $100 debt. How much is the bank's capital?

Accepted Answer

A)  $300 million 
B)  $600 million 
C)  $1000 million 
D)  $1400 million 
A)  $300 million 
B)  $600 million 
C)  $1000 million 
D)  $1400 million

Question 8

What is the average currency holding of Canadian dollars relative to Canadian population?

Accepted Answer

A)  $457 
B)  $1457 
C)  $2457 
D)  $3457 
A)  $457 
B)  $1457 
C)  $2457 
D)  $3457

If currency is $50 billion, chequable deposits $700 billion, other minor, less liquid categories $300 billion, and credit card debt $500 billion, how much is M1+?

If banks decide to hold a smaller part of their deposits as excess reserves, the money supply will fall, other things equal.

What does the text mean by, and how does it answer the question, "Where is all the currency?"

Which statement best describes the outcomes of a decrease in the reserve requirement in a fractional reserve system?

Which statement best explains whether bank runs are a problem for the economy?

A bank has (in millions): $200 reserves, $800 loans, $400 securities, $1000 deposits, and $100 debt. How much is the bank's capital?

What is the average currency holding of Canadian dollars relative to Canadian population?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 10: The Monetary System

If currency is $50 billion, chequable deposits $700 billion, other minor, less liquid categories $300 billion, and credit card debt $500 billion, how much is M1+?

If banks decide to hold a smaller part of their deposits as excess reserves, the money supply will fall, other things equal.

What does the text mean by, and how does it answer the question, "Where is all the currency?"

Which statement best describes the outcomes of a decrease in the reserve requirement in a fractional reserve system?

Which statement best explains whether bank runs are a problem for the economy?

A bank has (in millions): $200 reserves, $800 loans, $400 securities, $1000 deposits, and $100 debt. How much is the bank's capital?

What is the average currency holding of Canadian dollars relative to Canadian population?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters