Question 1

Commodity money refers to

Accepted Answer

A)  gold. 
B)  silver. 
C)  fiat money. 
D)  bank reserves. 
E)  any asset of intrinsic value that is generally accepted as a means of payment. 
A)  gold. 
B)  silver. 
C)  fiat money. 
D)  bank reserves. 
E)  any asset of intrinsic value that is generally accepted as a means of payment.

Question 2

The money supply in Macroland is currently 2,500,bank reserves are 200,currency held by the public is 500,and the banks' desired reserve-deposit ratio is 10%.Assuming that the values of currency held by the public and the desired reserve-deposit ratio do not change,if the Central Bank of Macroland wishes to increase the money supply to 3,000,then it should conduct an open-market _________ government bonds to/from the public.

Accepted Answer

A)  purchase of 50 
B)  purchase of 250 
C)  purchase of 500 
D)  sale of 50 
E)  sale of 500 
A)  purchase of 50 
B)  purchase of 250 
C)  purchase of 500 
D)  sale of 50 
E)  sale of 500

Question 3

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

Accepted Answer

A)  $50,000,000;$60,000,000 
B)  $55,000,000;$55,000,000 
C)  $50,000,000;$55,000,000 
D)  $100,000,000;$100,000,000 
E)  $100,000,000;$110,000,000 
A)  $50,000,000;$60,000,000 
B)  $55,000,000;$55,000,000 
C)  $50,000,000;$55,000,000 
D)  $100,000,000;$100,000,000 
E)  $100,000,000;$110,000,000

Question 4

Use the information in the table below to calculate the value of the M1 measure of the money supply.

Accepted Answer

A)  $135 billion. 
B)  $521 billion. 
C)  $681 billion. 
D)  $726 billion. 
E)  $916 billion. 
A)  $135 billion. 
B)  $521 billion. 
C)  $681 billion. 
D)  $726 billion. 
E)  $916 billion.

Question 5

The banking system can increase chequing deposits by more than a single bank,because

Accepted Answer

A)  the banking system must keep reserves equal to 100% of its chequing deposits. 
B)  the central bank follows policies that prevent reserves from falling below the level required by law. 
C)  excess reserves loaned out by any particular bank will be deposited in some other bank. 
D)  borrowers often retain a portion of a loan in cash. 
E)  excess reserves loaned out by any particular bank will be taken out of circulation. 
A)  the banking system must keep reserves equal to 100% of its chequing deposits. 
B)  the central bank follows policies that prevent reserves from falling below the level required by law. 
C)  excess reserves loaned out by any particular bank will be deposited in some other bank. 
D)  borrowers often retain a portion of a loan in cash. 
E)  excess reserves loaned out by any particular bank will be taken out of circulation.

Question 6

When the central bank buys $1,000,000 worth of government bonds from the public,the money supply

Accepted Answer

A)  increases by more than $1,000,000. 
B)  increases by $1,000,000. 
C)  increases by less than $1,000,000. 
D)  does not change. 
E)  decreases by $1,000,000. 
A)  increases by more than $1,000,000. 
B)  increases by $1,000,000. 
C)  increases by less than $1,000,000. 
D)  does not change. 
E)  decreases by $1,000,000.

Question 7

The money supply in Macroland is currently 3,000,bank reserves are 500,currency held by the public is 500,and the banks' desired reserve-deposit ratio is 20%.Assuming that the values of the currency held by the public and the desired reserve-deposit ratio do not change,if the Central Bank of Macroland wishes to decrease the money supply to 2,500,then it should conduct an open-market ________ government bonds to/from the public.

Accepted Answer

A)  purchase of 100 
B)  purchase of 250 
C)  purchase of 500 
D)  sale of 100 
E)  sale of 500 
A)  purchase of 100 
B)  purchase of 250 
C)  purchase of 500 
D)  sale of 100 
E)  sale of 500

Question 8

When the central bank buys $5,000,000 worth of government bonds to the public,the money supply

Accepted Answer

A)  increases by more than $5,000,000. 
B)  increases by $5,000,000. 
C)  increases by less than $5,000,000. 
D)  does not change. 
E)  decreases by $5,000,000. 
A)  increases by more than $5,000,000. 
B)  increases by $5,000,000. 
C)  increases by less than $5,000,000. 
D)  does not change. 
E)  decreases by $5,000,000.

Question 9

The M2 measure of money consists of all the assets in M1 plus assets that are

Accepted Answer

A)  usable in making payments but at a much lesser cost than currency or chequing accounts 
B)  usable in making payments but at a much greater cost than currency or chequing accounts 
C)  only denominated in foreign currency. 
D)  taxed at different rates as mandated by Canadian banking laws. 
E)  taxed at identical rates as mandated by Canadian banking laws. 
A)  usable in making payments but at a much lesser cost than currency or chequing accounts 
B)  usable in making payments but at a much greater cost than currency or chequing accounts 
C)  only denominated in foreign currency. 
D)  taxed at different rates as mandated by Canadian banking laws. 
E)  taxed at identical rates as mandated by Canadian banking laws.

Question 10

The amount of money in Canada is determined by

Accepted Answer

A)  the Bank of Canada. 
B)  the commercial banks. 
C)  the public. 
D)  the combined behaviour of the commercial banks and the public. 
E)  the combined behaviour of the commercial banks and the public,and the actions of the Bank of Canada. 
A)  the Bank of Canada. 
B)  the commercial banks. 
C)  the public. 
D)  the combined behaviour of the commercial banks and the public. 
E)  the combined behaviour of the commercial banks and the public,and the actions of the Bank of Canada.

Question 11

Using money as a ________ avoids the problem of the double coincidence of wants.

Accepted Answer

A)  medium of exchange 
B)  measure of value 
C)  standard of deferred payment 
D)  store of value 
E)  tool of monetary policy 
A)  medium of exchange 
B)  measure of value 
C)  standard of deferred payment 
D)  store of value 
E)  tool of monetary policy

Question 12

When money is used to purchase goods and services,it serves as a

Accepted Answer

A)  financial intermediary. 
B)  double coincidence of wants. 
C)  store of value. 
D)  medium of exchange. 
E)  unit of account. 
A)  financial intermediary. 
B)  double coincidence of wants. 
C)  store of value. 
D)  medium of exchange. 
E)  unit of account.

Question 13

If the actual reserve-deposit ratio equals 15% for a bank,but the desired reserve-deposit ratio for this bank is 10%,the bank should

Accepted Answer

A)  do nothing because this is a profitable situation. 
B)  stop making loans. 
C)  send the extra reserves to the central bank. 
D)  request that customers withdraw deposits from the bank. 
E)  make more loans in order to earn interest. 
A)  do nothing because this is a profitable situation. 
B)  stop making loans. 
C)  send the extra reserves to the central bank. 
D)  request that customers withdraw deposits from the bank. 
E)  make more loans in order to earn interest.

Question 14

The identity stating that money times its velocity equals the price level times real output is called the

Accepted Answer

A)  quantity equation. 
B)  velocity equation. 
C)  hyperinflation equation. 
D)  money supply equation. 
E)  nominal equation. 
A)  quantity equation. 
B)  velocity equation. 
C)  hyperinflation equation. 
D)  money supply equation. 
E)  nominal equation.

Question 15

Bank reserves divided by bank deposits are called

Accepted Answer

A)  fractional-reserve banking. 
B)  100%-reserve banking. 
C)  the desired reserve-deposit ratio. 
D)  the asset-liability ratio. 
E)  the banking system unit of account. 
A)  fractional-reserve banking. 
B)  100%-reserve banking. 
C)  the desired reserve-deposit ratio. 
D)  the asset-liability ratio. 
E)  the banking system unit of account.

Question 16

Money is

Accepted Answer

A)  the same as income. 
B)  all financial assets. 
C)  any asset used to make purchases and to settle debts. 
D)  the sum of assets minus liabilities. 
E)  the market value of all final goods and services produced in a country in a year. 
A)  the same as income. 
B)  all financial assets. 
C)  any asset used to make purchases and to settle debts. 
D)  the sum of assets minus liabilities. 
E)  the market value of all final goods and services produced in a country in a year.

Question 17

The direct trade of goods and services for other goods and services is called

Accepted Answer

A)  financial intermediation. 
B)  diversification. 
C)  barter. 
D)  using a medium of exchange. 
E)  the efficient allocation of resources. 
A)  financial intermediation. 
B)  diversification. 
C)  barter. 
D)  using a medium of exchange. 
E)  the efficient allocation of resources.

Question 18

The current Governor of the Bank of Canada is

Accepted Answer

A)  Stephen Harper. 
B)  Tiff Macklem. 
C)  Jim Flaherty. 
D)  Mark Carney. 
E)  Ben BernankE. 
A)  Stephen Harper. 
B)  Tiff Macklem. 
C)  Jim Flaherty. 
D)  Mark Carney. 
E)  Ben BernankE.

Question 19

The velocity of money is

Accepted Answer

A)  a measure of the speed at which money changes hands in transactions involving final goods and services. 
B)  the sum of currency outside banks and balances held in chequing accounts. 
C)  cash or similar assets held by commercial banks for the purpose of meeting depositor withdrawals and payments. 
D)  bank reserves divided by deposits. 
E)  the transfer of government deposits by the central bank between the government's account at the central bank and the government's accounts at commercial banks. 
A)  a measure of the speed at which money changes hands in transactions involving final goods and services. 
B)  the sum of currency outside banks and balances held in chequing accounts. 
C)  cash or similar assets held by commercial banks for the purpose of meeting depositor withdrawals and payments. 
D)  bank reserves divided by deposits. 
E)  the transfer of government deposits by the central bank between the government's account at the central bank and the government's accounts at commercial banks.

Question 20

Hyperinflation is caused by rates of ________ of several hundred percent or more per year,which is usually the result of governments accumulating large ________.

Accepted Answer

A)  GDP growth;trade deficits 
B)  GDP growth;budget deficits 
C)  money growth;trade deficits 
D)  money growth;budget deficits 
E)  consumption growth;trade deficits 
A)  GDP growth;trade deficits 
B)  GDP growth;budget deficits 
C)  money growth;trade deficits 
D)  money growth;budget deficits 
E)  consumption growth;trade deficits

Commodity money refers to

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

Use the information in the table below to calculate the value of the M1 measure of the money supply.

The banking system can increase chequing deposits by more than a single bank,because

When the central bank buys $1,000,000 worth of government bonds from the public,the money supply

When the central bank buys $5,000,000 worth of government bonds to the public,the money supply

The M2 measure of money consists of all the assets in M1 plus assets that are

The amount of money in Canada is determined by

Using money as a ________ avoids the problem of the double coincidence of wants.

When money is used to purchase goods and services,it serves as a

If the actual reserve-deposit ratio equals 15% for a bank,but the desired reserve-deposit ratio for this bank is 10%,the bank should

The identity stating that money times its velocity equals the price level times real output is called the

Bank reserves divided by bank deposits are called

Money is

The direct trade of goods and services for other goods and services is called

The current Governor of the Bank of Canada is

The velocity of money is

Hyperinflation is caused by rates of of several hundred percent or more per year,which is usually the result of governments accumulating large .

Measuring Macroeconomic Performance: Output and Prices

Measuring Macroeconomic Performance: Saving and Wealth

Measuring Macroeconomic Performance: Wages, Employment and the Labour Market

Short-Term Economic Fluctuations

Spending and Output in the Short Run

Fiscal Policy

Money, Prices and the Reserve Bank

The Reserve Bank and the Economy

Macroeconomic Policy

The Economy in the Long Run: an Introduction to Economic Growth

The Production Function Approach to Understanding Growth

Savings, Capital Formation and Comparative Economic Growth

International Trade

Exchange Rates and the Open Economy

The Balance of Payments: Net Exports and International Capital Flows

Filters

Exam 9: The Aggregate Demand - Aggregate Supply Model

Commodity money refers to

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

Use the information in the table below to calculate the value of the M1 measure of the money supply.

The banking system can increase chequing deposits by more than a single bank,because

When the central bank buys $1,000,000 worth of government bonds from the public,the money supply

When the central bank buys $5,000,000 worth of government bonds to the public,the money supply

The M2 measure of money consists of all the assets in M1 plus assets that are

The amount of money in Canada is determined by

Using money as a ________ avoids the problem of the double coincidence of wants.

When money is used to purchase goods and services,it serves as a

If the actual reserve-deposit ratio equals 15% for a bank,but the desired reserve-deposit ratio for this bank is 10%,the bank should

The identity stating that money times its velocity equals the price level times real output is called the

Bank reserves divided by bank deposits are called

Money is

The direct trade of goods and services for other goods and services is called

The current Governor of the Bank of Canada is

The velocity of money is

Hyperinflation is caused by rates of ________ of several hundred percent or more per year,which is usually the result of governments accumulating large ________.

Measuring Macroeconomic Performance: Output and Prices

Measuring Macroeconomic Performance: Saving and Wealth

Measuring Macroeconomic Performance: Wages, Employment and the Labour Market

Short-Term Economic Fluctuations

Spending and Output in the Short Run

Fiscal Policy

Money, Prices and the Reserve Bank

The Reserve Bank and the Economy

Macroeconomic Policy

The Economy in the Long Run: an Introduction to Economic Growth

The Production Function Approach to Understanding Growth

Savings, Capital Formation and Comparative Economic Growth

International Trade

Exchange Rates and the Open Economy

The Balance of Payments: Net Exports and International Capital Flows

Filters

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

Hyperinflation is caused by rates of of several hundred percent or more per year,which is usually the result of governments accumulating large .