Question 1

Retained earnings are usually sufficient to finance a firm's rapid expansion in a high-growth economy.

Accepted Answer

A) True 
 B)False

Question 2

Paper currency

Accepted Answer

A)  is commodity money. 
B)  is fiat money. 
C)  is barter money. 
D)  includes bonds and securities. 
A)  is commodity money. 
B)  is fiat money. 
C)  is barter money. 
D)  includes bonds and securities.

Question 3

Why is gold not a good medium of exchange?

Accepted Answer

Gold is an example of commodity money.Th

Question 4

The portion of ________ that a bank does not loan out or spend on securities is known as ________.

Accepted Answer

A)  loans; reserves 
B)  deposits; reserves 
C)  deposits; securities 
D)  loans; securities 
A)  loans; reserves 
B)  deposits; reserves 
C)  deposits; securities 
D)  loans; securities

Question 5

What is money,what are the main functions that money performs,and which function of money is its primary function?

Accepted Answer

Money is anything that people are genera

Question 6

What are the main measures of money used in Australia? List them from the narrowest to the broadest measure.

Accepted Answer

Currency,M

Question 7

The ________ the amount of excess reserves a bank holds,the ________ the size of the deposit multiplier.

Accepted Answer

A)  greater; larger 
B)  greater; smaller 
C)  smaller; smaller 
D)  smaller; greater likelihood there is no change in 
A)  greater; larger 
B)  greater; smaller 
C)  smaller; smaller 
D)  smaller; greater likelihood there is no change in

Question 8

What are the functions of money?

Accepted Answer

The functions of money are: a

Question 9

If,during a deposit expansion,not all money is re-deposited into the banking system and some leaks out as currency,then the real world multiplier is

Accepted Answer

A)  smaller than 1/RR. 
B)  larger than 1/RR. 
C)  equal to 1/RR. 
D)  not related to 1/RR. 
A)  smaller than 1/RR. 
B)  larger than 1/RR. 
C)  equal to 1/RR. 
D)  not related to 1/RR.

Question 10

The statement,'Bill Gates has $1 million in his demand-deposit account' describes Mr Gates'

Accepted Answer

A)  income. 
B)  credit. 
C)  money. 
D)  wealth. 
A)  income. 
B)  credit. 
C)  money. 
D)  wealth.

Question 11

The simple deposit multiplier is the ratio of the amount of

Accepted Answer

A)  new reserves created by the banks to the amount of deposits. 
B)  new reserves created by the banks to the amount of loans. 
C)  deposits created by the banks to the amount of new reserves. 
D)  deposits created by the banks. 
A)  new reserves created by the banks to the amount of deposits. 
B)  new reserves created by the banks to the amount of loans. 
C)  deposits created by the banks to the amount of new reserves. 
D)  deposits created by the banks.

Question 12

Why is the real-world deposit multiplier smaller than 1/RR,where RR is the reserve ratio?

Accepted Answer

There are two reasons why the real-world

Question 13

Which of the following criteria would make gold a poor medium of exchange?

Accepted Answer

A)  Its value depends on its purity, and its purity is not easy to visibly identify. 
B)  Durability so that value is not lost by spoilage. 
C)  Value relative to its weight so that amounts large enough to be useful in trade can be easily transported. 
D)  Divisibility because different goods are valued differently. 
A)  Its value depends on its purity, and its purity is not easy to visibly identify. 
B)  Durability so that value is not lost by spoilage. 
C)  Value relative to its weight so that amounts large enough to be useful in trade can be easily transported. 
D)  Divisibility because different goods are valued differently.

Question 14

Deposits into bank accounts are recorded as assets in the balance sheets of banks.

Accepted Answer

A) True 
 B)False

Question 15

A car dealer sells you a car today in exchange for money in the future.This illustrates which function of money?

Accepted Answer

A)  Medium of exchange 
B)  Unit of account 
C)  Store of value 
D)  Standard of deferred payment 
A)  Medium of exchange 
B)  Unit of account 
C)  Store of value 
D)  Standard of deferred payment

Question 16

Suppose that your bank's reserve ratio is 0.2 and you deposit $50 000 into the bank.What is the deposit multiplier? What is the total increase in deposits in the banking system? What is the change in the money supply?

Accepted Answer

The simple deposit multiplier is equal t

Question 17

Money cannot serve as a medium of exchange unless it also serves as a store of value.Is this statement true or false? Explain.

Accepted Answer

A) True 
 B)False

Question 18

Assume that banks become more conservative in their lending policies and start holding some excess liquid assets.Compared to a situation in which banks are not holding excess reserves,the size of the deposit multiplier will be

Accepted Answer

A)  larger. 
B)  smaller. 
C)  zero. 
D)  the same. 
A)  larger. 
B)  smaller. 
C)  zero. 
D)  the same.

Question 19

The key to having the citizens in an economy accept something as money is

Accepted Answer

A)  having the federal government declare the good be accepted in payment of debts. 
B)  having the federal government declare that the good is legal tender. 
C)  that the good should have gold backing it. 
D)  that all citizens accept the good as a means of payment for transactions and debts. 
A)  having the federal government declare the good be accepted in payment of debts. 
B)  having the federal government declare that the good is legal tender. 
C)  that the good should have gold backing it. 
D)  that all citizens accept the good as a means of payment for transactions and debts.

Question 20

Assume that some people who receive bank loans do not deposit the full amount of the loan into a bank.This will cause the deposit multiplier to be ________ it would have been if all loans are deposited in banks.

Accepted Answer

A)  greater than 
B)  the same as 
C)  either greater than or smaller than 
D)  smaller than 
A)  greater than 
B)  the same as 
C)  either greater than or smaller than 
D)  smaller than

Retained earnings are usually sufficient to finance a firm's rapid expansion in a high-growth economy.

Paper currency

Why is gold not a good medium of exchange?

The portion of that a bank does not loan out or spend on securities is known as .

What is money,what are the main functions that money performs,and which function of money is its primary function?

What are the main measures of money used in Australia? List them from the narrowest to the broadest measure.

The the amount of excess reserves a bank holds,the the size of the deposit multiplier.

What are the functions of money?

If,during a deposit expansion,not all money is re-deposited into the banking system and some leaks out as currency,then the real world multiplier is

The statement,'Bill Gates has $1 million in his demand-deposit account' describes Mr Gates'

The simple deposit multiplier is the ratio of the amount of

Why is the real-world deposit multiplier smaller than 1/RR,where RR is the reserve ratio?

Which of the following criteria would make gold a poor medium of exchange?

Deposits into bank accounts are recorded as assets in the balance sheets of banks.

A car dealer sells you a car today in exchange for money in the future.This illustrates which function of money?

Suppose that your bank's reserve ratio is 0.2 and you deposit $50 000 into the bank.What is the deposit multiplier? What is the total increase in deposits in the banking system? What is the change in the money supply?

Money cannot serve as a medium of exchange unless it also serves as a store of value.Is this statement true or false? Explain.

Assume that banks become more conservative in their lending policies and start holding some excess liquid assets.Compared to a situation in which banks are not holding excess reserves,the size of the deposit multiplier will be

The key to having the citizens in an economy accept something as money is

Assume that some people who receive bank loans do not deposit the full amount of the loan into a bank.This will cause the deposit multiplier to be ________ it would have been if all loans are deposited in banks.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 15: Aggregate Demand and Aggregate Supply Analysis

Retained earnings are usually sufficient to finance a firm's rapid expansion in a high-growth economy.

Paper currency

Why is gold not a good medium of exchange?

The portion of ________ that a bank does not loan out or spend on securities is known as ________.

What is money,what are the main functions that money performs,and which function of money is its primary function?

What are the main measures of money used in Australia? List them from the narrowest to the broadest measure.

The ________ the amount of excess reserves a bank holds,the ________ the size of the deposit multiplier.

What are the functions of money?

If,during a deposit expansion,not all money is re-deposited into the banking system and some leaks out as currency,then the real world multiplier is

The statement,'Bill Gates has $1 million in his demand-deposit account' describes Mr Gates'

The simple deposit multiplier is the ratio of the amount of

Why is the real-world deposit multiplier smaller than 1/RR,where RR is the reserve ratio?

Which of the following criteria would make gold a poor medium of exchange?

Deposits into bank accounts are recorded as assets in the balance sheets of banks.

A car dealer sells you a car today in exchange for money in the future.This illustrates which function of money?

Suppose that your bank's reserve ratio is 0.2 and you deposit $50 000 into the bank.What is the deposit multiplier? What is the total increase in deposits in the banking system? What is the change in the money supply?

Money cannot serve as a medium of exchange unless it also serves as a store of value.Is this statement true or false? Explain.

Assume that banks become more conservative in their lending policies and start holding some excess liquid assets.Compared to a situation in which banks are not holding excess reserves,the size of the deposit multiplier will be

The key to having the citizens in an economy accept something as money is

Assume that some people who receive bank loans do not deposit the full amount of the loan into a bank.This will cause the deposit multiplier to be ________ it would have been if all loans are deposited in banks.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

The portion of that a bank does not loan out or spend on securities is known as .

The the amount of excess reserves a bank holds,the the size of the deposit multiplier.