Question 1

Joe wants to trade eggs for sausage. Lashonda wants to trade eggs for orange juice. Joe and Lashonda have a double coincidence of wants.

Accepted Answer

A) True 
 B)False

Question 2

In an economy that relies on barter, trade requires a double coincidence of wants.

Accepted Answer

A) True 
 B)False

Question 3

During what period can the Bank of Canada influence unemployment?

Accepted Answer

A) in the short and long run 
B) in the short run, but not the long run 
C) in the long run, but not the short run 
D) in neither the short nor long run 
A) in the short and long run 
B) in the short run, but not the long run 
C) in the long run, but not the short run 
D) in neither the short nor long run

Question 4

Which of the following is included in the M2 definition of the money supply?

Accepted Answer

A) credit cards 
B) term deposits 
C) corporate bonds 
D) foreign currency accounts 
A) credit cards 
B) term deposits 
C) corporate bonds 
D) foreign currency accounts

Question 5

Which of the following best describes the consequences of open market sales conducted by the Bank of Canada?

Accepted Answer

A) Bank reserves increase and the money supply increases. 
B) Bank reserves increase and the money supply decreases. 
C) Bank reserves decrease and the money supply increases. 
D) Bank reserves decrease and the money supply decreases. 
A) Bank reserves increase and the money supply increases. 
B) Bank reserves increase and the money supply decreases. 
C) Bank reserves decrease and the money supply increases. 
D) Bank reserves decrease and the money supply decreases.

Question 6

When the Bank of Canada conducts open market purchases, how do commercial banks' assets most likely change?

Accepted Answer

A) Reserves increase and banks increase lending. 
B) Reserves increase and banks decrease lending. 
C) Reserves decrease and banks increase lending. 
D) Reserves decrease and banks decrease lending. 
A) Reserves increase and banks increase lending. 
B) Reserves increase and banks decrease lending. 
C) Reserves decrease and banks increase lending. 
D) Reserves decrease and banks decrease lending.

Question 7

If the reserve ratio is 10 percent, what is the money multiplier?

Accepted Answer

A) 100 
B) 10 
C) 9/10 
D) 1/10 
A) 100 
B) 10 
C) 9/10 
D) 1/10

Question 8

When a bank loans out $1000, what happens to the money supply?

Accepted Answer

A) It does not change. 
B) It decreases. 
C) It increases. 
D) It has an indeterminate effect on the money supply. 
A) It does not change. 
B) It decreases. 
C) It increases. 
D) It has an indeterminate effect on the money supply.

Question 9

Which of the following best defines reserve requirements?

Accepted Answer

A) They are regulations concerning the amount banks are allowed to borrow from the central bank. 
B) They are regulations concerning the amount of reserves banks must hold against deposits. 
C) They are regulations concerning reserves banks must hold based on the number and type of loans they make. 
D) They are regulations concerning the interest rate at which banks can borrow from the central bank. 
A) They are regulations concerning the amount banks are allowed to borrow from the central bank. 
B) They are regulations concerning the amount of reserves banks must hold against deposits. 
C) They are regulations concerning reserves banks must hold based on the number and type of loans they make. 
D) They are regulations concerning the interest rate at which banks can borrow from the central bank.

Question 10

Explain why banks can influence the money supply if the required reserve ratio is less than 100 percent.

Accepted Answer

When the reserve requirement is less tha

Question 11

Are credit cards and debit cards money? What's the difference between credit and debit cards?

Accepted Answer

Neither credit cards nor debit cards are

Question 12

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 ove

Question 13

Which of the following is most likely to happen under a fractional reserve banking system?

Accepted Answer

A) Banks hold more reserves than deposits. 
B) Banks generally lend out a majority of the funds deposited. 
C) Banks cause the money supply to fall by lending out reserves. 
D) Banks only accept savings deposits. 
A) Banks hold more reserves than deposits. 
B) Banks generally lend out a majority of the funds deposited. 
C) Banks cause the money supply to fall by lending out reserves. 
D) Banks only accept savings deposits.

Question 14

Which of the following best explains the role of the Bank of Canada?

Accepted Answer

A) It maintains a target exchange rate. 
B) It determines the bank rate. 
C) It makes loans to large corporations. 
D) It controls the government budget deficit. 
A) It maintains a target exchange rate. 
B) It determines the bank rate. 
C) It makes loans to large corporations. 
D) It controls the government budget deficit.

Question 15

Which of the following best characterizes credit cards?

Accepted Answer

A) They are a payment form of money. 
B) They are part of the M1 money supply. 
C) They are a method of deferring payment. 
D) They are a unit of account. 
A) They are a payment form of money. 
B) They are part of the M1 money supply. 
C) They are a method of deferring payment. 
D) They are a unit of account.

Question 16

Which of the following plays the role of a central bank in Canada?

Accepted Answer

A) TD Canada Trust 
B) the Bank of Montreal 
C) the Bank of Canada 
D) the Royal Bank of Canada 
A) TD Canada Trust 
B) the Bank of Montreal 
C) the Bank of Canada 
D) the Royal Bank of Canada

Question 17

If the reserve ratio is 15 percent, by how much will an additional $1000 of reserves increase the money supply?

Accepted Answer

A) $1176 
B) $1275 
C) $5667 
D) $6667 
A) $1176 
B) $1275 
C) $5667 
D) $6667

Question 18

Which of the following has intrinsic value?

Accepted Answer

A) a golden coin 
B) a twenty-dollar bill 
C) a bank account 
D) a personal cheque 
A) a golden coin 
B) a twenty-dollar bill 
C) a bank account 
D) a personal cheque

Question 19

The Bank of Canada was created in 1934 in the wake of the Great Depression.

Accepted Answer

A) True 
 B)False

Question 20

Use the balance sheet below for the following questions.
Table 29-2
  
-Refer to Table 29-2. If $1000 is deposited into the First Bank of Mason City, which of the following happens?

Accepted Answer

A) Total reserves will initially increase by $200. 
B) Liabilities will decrease by $1000. 
C) Assets will increase by $1000. 
D) Required reserves will increase by $800. 
A) Total reserves will initially increase by $200. 
B) Liabilities will decrease by $1000. 
C) Assets will increase by $1000. 
D) Required reserves will increase by $800.

Joe wants to trade eggs for sausage. Lashonda wants to trade eggs for orange juice. Joe and Lashonda have a double coincidence of wants.

In an economy that relies on barter, trade requires a double coincidence of wants.

During what period can the Bank of Canada influence unemployment?

Which of the following is included in the M2 definition of the money supply?

Which of the following best describes the consequences of open market sales conducted by the Bank of Canada?

When the Bank of Canada conducts open market purchases, how do commercial banks' assets most likely change?

If the reserve ratio is 10 percent, what is the money multiplier?

When a bank loans out $1000, what happens to the money supply?

Which of the following best defines reserve requirements?

Explain why banks can influence the money supply if the required reserve ratio is less than 100 percent.

Are credit cards and debit cards money? What's the difference between credit and debit cards?

What does the text mean by, and how does it answer the question, "Where Is All the Currency?"

Which of the following is most likely to happen under a fractional reserve banking system?

Which of the following best explains the role of the Bank of Canada?

Which of the following best characterizes credit cards?

Which of the following plays the role of a central bank in Canada?

If the reserve ratio is 15 percent, by how much will an additional $1000 of reserves increase the money supply?

Which of the following has intrinsic value?

The Bank of Canada was created in 1934 in the wake of the Great Depression.

Use the balance sheet below for the following questions. Table 29-2 -Refer to Table 29-2. If $1000 is deposited into the First Bank of Mason City, which of the following happens?

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 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

Joe wants to trade eggs for sausage. Lashonda wants to trade eggs for orange juice. Joe and Lashonda have a double coincidence of wants.

In an economy that relies on barter, trade requires a double coincidence of wants.

During what period can the Bank of Canada influence unemployment?

Which of the following is included in the M2 definition of the money supply?

Which of the following best describes the consequences of open market sales conducted by the Bank of Canada?

When the Bank of Canada conducts open market purchases, how do commercial banks' assets most likely change?

If the reserve ratio is 10 percent, what is the money multiplier?

When a bank loans out $1000, what happens to the money supply?

Which of the following best defines reserve requirements?

Explain why banks can influence the money supply if the required reserve ratio is less than 100 percent.

Are credit cards and debit cards money? What's the difference between credit and debit cards?

What does the text mean by, and how does it answer the question, "Where Is All the Currency?"

Which of the following is most likely to happen under a fractional reserve banking system?

Which of the following best explains the role of the Bank of Canada?

Which of the following best characterizes credit cards?

Which of the following plays the role of a central bank in Canada?

If the reserve ratio is 15 percent, by how much will an additional $1000 of reserves increase the money supply?

Which of the following has intrinsic value?

The Bank of Canada was created in 1934 in the wake of the Great Depression.

Use the balance sheet below for the following questions. Table 29-2 -Refer to Table 29-2. If $1000 is deposited into the First Bank of Mason City, which of the following happens?

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 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