Question 1

In the context of the money market,graphically illustrate and explain the impact of a contractionary monetary policy on interest rates.

Accepted Answer

A decrease in the nominal money supply w

Question 2

Institutions that accept deposits from individuals and organizations,against which depositors can write checks on demand for their market transactions and that use these deposits to make loans are called:

Accepted Answer

A) depository institutions. 
B) financial market institutions. 
C) insurance companies. 
D) none of the above. 
A) depository institutions. 
B) financial market institutions. 
C) insurance companies. 
D) none of the above.

Question 3

There are ________ voting members on the FOMC.

Accepted Answer

A) 4 
B) 7 
C) 12 
D) 15 
A) 4 
B) 7 
C) 12 
D) 15

Question 4

The function of money that enables individuals to exchange goods and services in a common unit of account is called:

Accepted Answer

A) medium of exchange. 
B) store of value. 
C) unit of account. 
D) measure of power. 
A) medium of exchange. 
B) store of value. 
C) unit of account. 
D) measure of power.

Question 5

Why is the money multiplier smaller than the simple deposit multiplier?

Accepted Answer

In the case of the money multiplier,indi

Question 6

Open market sale of government securities results in:

Accepted Answer

A) an increase in bank reserves. 
B) a decrease in bank reserves. 
C) a decrease in interest rates. 
D) none of the above. 
A) an increase in bank reserves. 
B) a decrease in bank reserves. 
C) a decrease in interest rates. 
D) none of the above.

Question 7

The monetary base consists of:

Accepted Answer

A) currency plus reserves. 
B) currency plus required reserves. 
C) currency plus excess reserves. 
D) currency plus demand deposits. 
A) currency plus reserves. 
B) currency plus required reserves. 
C) currency plus excess reserves. 
D) currency plus demand deposits.

Question 8

The fraction of deposits banks are required to keep as reserves is called the:

Accepted Answer

A) deposit requirement. 
B) reserve requirement. 
C) excess reserve requirement. 
D) none of the above. 
A) deposit requirement. 
B) reserve requirement. 
C) excess reserve requirement. 
D) none of the above.

Question 9

An increase in the real money supply can result from:

Accepted Answer

A) increase in the nominal money supply or an increase in the price level. 
B) increase in the nominal money supply or a decrease in the price level. 
C) decrease in the nominal money supply or an increase in the price level. 
D) decrease in the nominal money supply or a decrease in the price level. 
A) increase in the nominal money supply or an increase in the price level. 
B) increase in the nominal money supply or a decrease in the price level. 
C) decrease in the nominal money supply or an increase in the price level. 
D) decrease in the nominal money supply or a decrease in the price level.

Question 10

The currency deposit ratio,c,is 0.10.The reserve requirement,rr,is 0.07.The excess reserve ratio,e,is 0.10.What is the size of the money multiplier?

Accepted Answer

A) 4.70 
B) 4.07 
C) 4.75 
D) 4.00 
A) 4.70 
B) 4.07 
C) 4.75 
D) 4.00

Question 11

Credit cards do not fulfill the three functions of money.

Accepted Answer

A) True 
 B)False

Question 12

If banks operated under a 100 percent reserve system,commercial banks would not be able to create any further money.

Accepted Answer

A) True 
 B)False

Question 13

Contractionary monetary policy increases the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 14

The opportunity cost of hold real money balances is the:

Accepted Answer

A) interest rate. 
B) price level. 
C) all of the above. 
D) none of the above. 
A) interest rate. 
B) price level. 
C) all of the above. 
D) none of the above.

Question 15

Expansionary monetary policy decreases the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 16

A decrease in the real money supply can result from:

Accepted Answer

A) increase in the nominal money supply or an increase in the price level. 
B) increase in the nominal money supply or a decrease in the price level. 
C) decrease in the nominal money supply or an increase in the price level. 
D) decrease in the nominal money supply or a decrease in the price level. 
A) increase in the nominal money supply or an increase in the price level. 
B) increase in the nominal money supply or a decrease in the price level. 
C) decrease in the nominal money supply or an increase in the price level. 
D) decrease in the nominal money supply or a decrease in the price level.

Question 17

A decrease in the reserve requirement would:

Accepted Answer

A) decrease excess reserves and reflect an expansionary monetary policy. 
B) decrease excess reserves and reflect a contractionary monetary policy. 
C) increase excess reserves and reflect an expansionary monetary policy. 
D) increase excess reserves and reflect a contractionary monetary policy. 
A) decrease excess reserves and reflect an expansionary monetary policy. 
B) decrease excess reserves and reflect a contractionary monetary policy. 
C) increase excess reserves and reflect an expansionary monetary policy. 
D) increase excess reserves and reflect a contractionary monetary policy.

Question 18

The simple deposit multiplier is larger than the money multiplier.

Accepted Answer

A) True 
 B)False

Question 19

If $1000 was deposited in a bank and the reserve requirement is 0.10,how much is available for loans?

Accepted Answer

A) $900 
B) $910 
C) $920 
D) $930 
A) $900 
B) $910 
C) $920 
D) $930

Question 20

In the money market,an excess supply of money will:

Accepted Answer

A) increase the demand for bonds, increase bond prices, and decrease interest rates. 
B) increase the demand for bonds, decrease bond prices, and decrease interest rates. 
C) decrease the demand for bonds, increase bonds prices, and increase interest rates. 
D) decrease the demand for bonds, decrease bond prices, and increase interest rates. 
A) increase the demand for bonds, increase bond prices, and decrease interest rates. 
B) increase the demand for bonds, decrease bond prices, and decrease interest rates. 
C) decrease the demand for bonds, increase bonds prices, and increase interest rates. 
D) decrease the demand for bonds, decrease bond prices, and increase interest rates.

In the context of the money market,graphically illustrate and explain the impact of a contractionary monetary policy on interest rates.

Institutions that accept deposits from individuals and organizations,against which depositors can write checks on demand for their market transactions and that use these deposits to make loans are called:

There are ________ voting members on the FOMC.

The function of money that enables individuals to exchange goods and services in a common unit of account is called:

Why is the money multiplier smaller than the simple deposit multiplier?

Open market sale of government securities results in:

The monetary base consists of:

The fraction of deposits banks are required to keep as reserves is called the:

An increase in the real money supply can result from:

The currency deposit ratio,c,is 0.10.The reserve requirement,rr,is 0.07.The excess reserve ratio,e,is 0.10.What is the size of the money multiplier?

Credit cards do not fulfill the three functions of money.

If banks operated under a 100 percent reserve system,commercial banks would not be able to create any further money.

Contractionary monetary policy increases the federal funds rate.

The opportunity cost of hold real money balances is the:

Expansionary monetary policy decreases the federal funds rate.

A decrease in the real money supply can result from:

A decrease in the reserve requirement would:

The simple deposit multiplier is larger than the money multiplier.

If $1000 was deposited in a bank and the reserve requirement is 0.10,how much is available for loans?

In the money market,an excess supply of money will:

Managers and Economics

Demand, supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, firms, and Governments on Real Goods and Services

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

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Exam 13: The Role of Money in the Macro Economy

In the context of the money market,graphically illustrate and explain the impact of a contractionary monetary policy on interest rates.

Institutions that accept deposits from individuals and organizations,against which depositors can write checks on demand for their market transactions and that use these deposits to make loans are called:

There are ________ voting members on the FOMC.

The function of money that enables individuals to exchange goods and services in a common unit of account is called:

Why is the money multiplier smaller than the simple deposit multiplier?

Open market sale of government securities results in:

The monetary base consists of:

The fraction of deposits banks are required to keep as reserves is called the:

An increase in the real money supply can result from:

The currency deposit ratio,c,is 0.10.The reserve requirement,rr,is 0.07.The excess reserve ratio,e,is 0.10.What is the size of the money multiplier?

Credit cards do not fulfill the three functions of money.

If banks operated under a 100 percent reserve system,commercial banks would not be able to create any further money.

Contractionary monetary policy increases the federal funds rate.

The opportunity cost of hold real money balances is the:

Expansionary monetary policy decreases the federal funds rate.

A decrease in the real money supply can result from:

A decrease in the reserve requirement would:

The simple deposit multiplier is larger than the money multiplier.

If $1000 was deposited in a bank and the reserve requirement is 0.10,how much is available for loans?

In the money market,an excess supply of money will:

Managers and Economics

Demand, supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, firms, and Governments on Real Goods and Services

The Aggregate Model of the Macro Economy

International and Balance of Payments Issues in the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

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