Question 1

Real demand for money is positively related to the level of real income in the economy.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

In the case of the money multiplier, ind

Question 3

The barter system requires the double coincidence of wants to be fulfilled.

Accepted Answer

A) True 
 B)False

Question 4

The ________ book provides information of current economic conditions and is used by the Federal Reserve in formulating monetary policy.

Accepted Answer

A) Red 
B) Blue 
C) Beige 
D) Green 
A) Red 
B) Blue 
C) Beige 
D) Green

Question 5

The quantity of money demanded is positively related to the interest rate.

Accepted Answer

A) True 
 B)False

Question 6

Open market sale will result in:

Accepted Answer

A) increase in bank reserves and a decrease in the federal funds rate. 
B) increase in bank reserves and an increase in the federal funds rate. 
C) decrease in bank reserves and a decrease in the federal funds rate. 
D) decrease in bank reserves and an increase in the federal funds rate. 
A) increase in bank reserves and a decrease in the federal funds rate. 
B) increase in bank reserves and an increase in the federal funds rate. 
C) decrease in bank reserves and a decrease in the federal funds rate. 
D) decrease in bank reserves and an increase in the federal funds rate.

Question 7

Describe the fractional reserve banking system.

Accepted Answer

Banks hold a portion of deposits in requ

Question 8

In the money market, an excess supply of money is equivalent to an excess supply of bonds.

Accepted Answer

A) True 
 B)False

Question 9

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 10

The legislation that made all depository institutions regardless of Federal Reserve membership subject to the reserve requirements established by the Fed is called the:

Accepted Answer

A) Glass-Steagall Act. 
B) McFadden Act. 
C) Monetary Control Act of 1980. 
D) none of the above 
A) Glass-Steagall Act. 
B) McFadden Act. 
C) Monetary Control Act of 1980. 
D) none of the above

Question 11

There are 15 Federal Reserve District Banks.

Accepted Answer

A) True 
 B)False

Question 12

Contractionary monetary policy increases the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 13

Open market operations are an appropriate tool for day-to-day changes in monetary policy.

Accepted Answer

A) True 
 B)False

Question 14

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 15

The private financial market where banks borrow and loan reserves to meet the minimum research requirements is called:

Accepted Answer

A) federal funds market. 
B) loanable funds market. 
C) discount loans market. 
D) repo market. 
A) federal funds market. 
B) loanable funds market. 
C) discount loans market. 
D) repo market.

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

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 18

Deposits held by commercial banks are insured by the:

Accepted Answer

A) Federal Trade Commission. 
B) Federal Deposit Insurance Corporation. 
C) Federal Communications Commission. 
D) Resolution Trust Corporation. 
A) Federal Trade Commission. 
B) Federal Deposit Insurance Corporation. 
C) Federal Communications Commission. 
D) Resolution Trust Corporation.

Question 19

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 20

The reserve requirement is 0.20.What is the simple deposit multiplier?

Accepted Answer

A) 1 
B) 5 
C) 0)10 
D) 100 
A) 1 
B) 5 
C) 0)10 
D) 100

Real demand for money is positively related to the level of real income in the economy.

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

The barter system requires the double coincidence of wants to be fulfilled.

The ________ book provides information of current economic conditions and is used by the Federal Reserve in formulating monetary policy.

The quantity of money demanded is positively related to the interest rate.

Open market sale will result in:

Describe the fractional reserve banking system.

In the money market, an excess supply of money is equivalent to an excess supply of bonds.

Open market sale of government securities results in:

The legislation that made all depository institutions regardless of Federal Reserve membership subject to the reserve requirements established by the Fed is called the:

There are 15 Federal Reserve District Banks.

Contractionary monetary policy increases the federal funds rate.

Open market operations are an appropriate tool for day-to-day changes in monetary policy.

The monetary base consists of:

The private financial market where banks borrow and loan reserves to meet the minimum research requirements is called:

A decrease in the real money supply can result from:

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

Deposits held by commercial banks are insured by the:

The opportunity cost of hold real money balances is the:

The reserve requirement is 0.20.What is the simple deposit multiplier?

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

Filters

Exam 13: The Role of Money in the Macro Economy

Real demand for money is positively related to the level of real income in the economy.

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

The barter system requires the double coincidence of wants to be fulfilled.

The ________ book provides information of current economic conditions and is used by the Federal Reserve in formulating monetary policy.

The quantity of money demanded is positively related to the interest rate.

Open market sale will result in:

Describe the fractional reserve banking system.

In the money market, an excess supply of money is equivalent to an excess supply of bonds.

Open market sale of government securities results in:

The legislation that made all depository institutions regardless of Federal Reserve membership subject to the reserve requirements established by the Fed is called the:

There are 15 Federal Reserve District Banks.

Contractionary monetary policy increases the federal funds rate.

Open market operations are an appropriate tool for day-to-day changes in monetary policy.

The monetary base consists of:

The private financial market where banks borrow and loan reserves to meet the minimum research requirements is called:

A decrease in the real money supply can result from:

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

Deposits held by commercial banks are insured by the:

The opportunity cost of hold real money balances is the:

The reserve requirement is 0.20.What is the simple deposit multiplier?

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

Filters