Exam 9: Saving and Capital Formation

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When the interest rate on newly issued bonds increases, the price of existing bonds:

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Two reasons savers keep deposits at banks are to:

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Savings deposits are ______ the M1 measure of money and ______ the M2 measure of money.

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The money supply will increase by a multiple of the increase in bank reserves created by the central bank unless:

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In the long run, countries with higher rates of money growth usually have:

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If the desired reserve/deposit ratio is 0.25 and the banking system receives an additional $10 million in reserves, bank deposits will increase by:

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The market value of a particular bond at any given point in time is called the bond's:

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The main disadvantage of using money as a store of value is that:

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An increase in the perceived riskiness of the stock of Company A ______ the risk premium investors require to purchase Company A stock and ______ the price of Company A stock.

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Firms that extend credit to borrowers using funds from savers are called:

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When the Fed sells government securities, the banks':

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Financial intermediaries, such as commercial banks, help borrowers, particularly small borrowers, by:

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Money is:

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The components of M2 that are not also in M1:

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In Macroland there is $10,000,000 in currency. The public holds half of the currency and banks hold the rest as reserves. If banks' desired reserve/deposit ratio is 10%, deposits in Macroland equal ______ and the money supply equals _______.

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In the past, some governments' budget deficits became so large that they could not raise sufficient taxes to finance the spending, so they ______, which led to ______.

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Assets of the commercial banking system include:

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In a fractional-reserve banking system the reserve/deposit ratio equals:

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A regular payment received by stockholders for each share they own is called a:

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M1 differs from M2 in that:

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