Question 1

Banks with excess reserves will supply more reserves to the federal funds market as the interest rate increases.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

A decrease in the discount rate would:

Accepted Answer

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

Question 5

The central bank of the United States is the:

Accepted Answer

A) First American Bank. 
B) Federal Reserve. 
C) Federal Deposit Insurance Corporation. 
D) U)S. Treasury. 
A) First American Bank. 
B) Federal Reserve. 
C) Federal Deposit Insurance Corporation. 
D) U)S. Treasury.

Question 6

The function of money that enables money to be used for future purchases 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 7

Money serves all of the following functions except:

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 8

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 9

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 10

The currency deposit ratio, c, is 0.10.The reserve requirement, rr, is 0.08.The excess reserve ratio, e, is 0.05.What is the size of the money multiplier?

Accepted Answer

A) 4)70 
B) 4)78 
C) 4)75 
D) 4)00 
A) 4)70 
B) 4)78 
C) 4)75 
D) 4)00

Banks with excess reserves will supply more reserves to the federal funds market as the interest rate increases.

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

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

A decrease in the discount rate would:

The central bank of the United States is the:

The function of money that enables money to be used for future purchases is called:

Money serves all of the following functions except:

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?

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:

The currency deposit ratio, c, is 0.10.The reserve requirement, rr, is 0.08.The excess reserve ratio, e, is 0.05.What is the size of the money 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

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Exam 13: The Role of Money in the Macro Economy

Banks with excess reserves will supply more reserves to the federal funds market as the interest rate increases.

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

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

A decrease in the discount rate would:

The central bank of the United States is the:

The function of money that enables money to be used for future purchases is called:

Money serves all of the following functions except:

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?

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:

The currency deposit ratio, c, is 0.10.The reserve requirement, rr, is 0.08.The excess reserve ratio, e, is 0.05.What is the size of the money 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