Question 1

The Reserve Bank of Australia undertakes ________ to manage interest rates to pursue macroeconomic objectives.

Accepted Answer

A)  printing money 
B)  monetary policy 
C)  fiscal policy 
D)  deposit insurance 
A)  printing money 
B)  monetary policy 
C)  fiscal policy 
D)  deposit insurance

Question 2

Net worth is

Accepted Answer

A)  something owned by a firm. 
B)  something the firm owes to someone else. 
C)  the difference between a firm's assets and liabilities. 
D)  the firm's balance sheet. 
A)  something owned by a firm. 
B)  something the firm owes to someone else. 
C)  the difference between a firm's assets and liabilities. 
D)  the firm's balance sheet.

Question 3

M1 includes

Accepted Answer

A)  currency plus demand deposits in banks. 
B)  currency plus demand deposits in Australian-owned banks only. 
C)  currency plus all bank and non-bank financial institution deposits. 
D)  currency plus all deposits in Australian- and foreign-owned banks. 
A)  currency plus demand deposits in banks. 
B)  currency plus demand deposits in Australian-owned banks only. 
C)  currency plus all bank and non-bank financial institution deposits. 
D)  currency plus all deposits in Australian- and foreign-owned banks.

Question 4

A bank's liabilities are

Accepted Answer

A)  things owned by or owed to the bank. 
B)  things the bank owes to someone else. 
C)  a measure of the bank's net losses. 
D)  included as part of the bank's reserves. 
A)  things owned by or owed to the bank. 
B)  things the bank owes to someone else. 
C)  a measure of the bank's net losses. 
D)  included as part of the bank's reserves.

Question 5

Money is

Accepted Answer

A)  an asset that people are generally willing to accept in exchange for goods and services. 
B)  a liability that people are willing to accept in exchange for goods and services. 
C)  the income a person earns over a period of time. 
D)  a person's assets net of liabilities at any point in time. 
A)  an asset that people are generally willing to accept in exchange for goods and services. 
B)  a liability that people are willing to accept in exchange for goods and services. 
C)  the income a person earns over a period of time. 
D)  a person's assets net of liabilities at any point in time.

Question 6

The ________ the reserve ratio,the ________ the simple deposit multiplier.

Accepted Answer

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

Question 7

Financial markets and financial intermediaries comprise the financial system in Australia.

Accepted Answer

A) True 
 B)False

Question 8

A farm worker gets paid today in money,but waits to spend the money until next week.Which function of money does this illustrate?

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 9

Explain whether a cash deposit into a bank is an asset or a liability for the bank.

Accepted Answer

The deposit is a liability for the bank,

Question 10

If the reserve ratio is RR,the simple deposit multiplier is defined as

Accepted Answer

A)    
B)    
C)    × change in bank reserves 
D)    × change in bank reserves 
A)    
B)    
C)    × change in bank reserves 
D)    × change in bank reserves

Question 11

The Reserve Bank of Australia intervenes in the financial markets mostly to stop interest rates from changing.

Accepted Answer

A) True 
 B)False

Question 12

Banks can increase the money supply by

Accepted Answer

A)  offering financial services, such as money market accounts. 
B)  printing additional currency notes. 
C)  paying interest to their depositors. 
D)  making loans that result in additional deposits. 
A)  offering financial services, such as money market accounts. 
B)  printing additional currency notes. 
C)  paying interest to their depositors. 
D)  making loans that result in additional deposits.

Question 13

Assets are

Accepted Answer

A)  something owned by a firm. 
B)  something the firm owes to someone else. 
C)  the firm's net worth. 
D)  the firm's balance sheet. 
A)  something owned by a firm. 
B)  something the firm owes to someone else. 
C)  the firm's net worth. 
D)  the firm's balance sheet.

Question 14

Which of the following is not a major function of the Reserve Bank of Australia?

Accepted Answer

A)  Maintaining the integrity of the financial system. 
B)  Monitoring credit growth. 
C)  Determining taxation rates. 
D)  Controlling the cash rate. 
A)  Maintaining the integrity of the financial system. 
B)  Monitoring credit growth. 
C)  Determining taxation rates. 
D)  Controlling the cash rate.

Question 15

If Thrifty Bank receives a $10 000 deposit and keeps 10 per cent of its deposits in reserve,how much will the bank loan out?

Accepted Answer

A)  $10 000 
B)  $1000 
C)  $9000 
D)  $11 000 
A)  $10 000 
B)  $1000 
C)  $9000 
D)  $11 000

Question 16

Among potential stores of value,money

Accepted Answer

A)  offers the highest rate of return. 
B)  increases in value during periods of inflation. 
C)  has the advantage of being the most liquid asset. 
D)  provides more services than other assets. 
A)  offers the highest rate of return. 
B)  increases in value during periods of inflation. 
C)  has the advantage of being the most liquid asset. 
D)  provides more services than other assets.

Question 17

A barter economy is an economy where

Accepted Answer

A)  goods and services are exchanged for money. 
B)  money is exchanged for goods and services. 
C)  goods and services are exchanged for other goods and services. 
D)  goods and services are exchanged for liabilities. 
A)  goods and services are exchanged for money. 
B)  money is exchanged for goods and services. 
C)  goods and services are exchanged for other goods and services. 
D)  goods and services are exchanged for liabilities.

Question 18

Suppose you deposit $2000 into a bank that has a reserve ratio of 0.1.How does this initially affect the bank's balance sheet?

Accepted Answer

A)  Reserves rise by $200. 
B)  Required reserves rise by $2000. 
C)  Deposits rise by $1000. 
D)  Excess reserves rise by $1800. 
A)  Reserves rise by $200. 
B)  Required reserves rise by $2000. 
C)  Deposits rise by $1000. 
D)  Excess reserves rise by $1800.

Question 19

List the five criteria necessary in order for a good to be suitable as a medium of exchange,and explain whether Australian currency is suitable to use as a medium of exchange.

Accepted Answer

The five criteria are: it must be accept

Question 20

The reserves of a bank

Accepted Answer

A)  are usually a small proportion of the bank's deposits. 
B)  include funds held at the Reserve Bank of Australia. 
C)  comprise vault cash. 
D)  All of these are correct. 
A)  are usually a small proportion of the bank's deposits. 
B)  include funds held at the Reserve Bank of Australia. 
C)  comprise vault cash. 
D)  All of these are correct.

The Reserve Bank of Australia undertakes ________ to manage interest rates to pursue macroeconomic objectives.

Net worth is

M1 includes

A bank's liabilities are

Money is

The the reserve ratio,the the simple deposit multiplier.

Financial markets and financial intermediaries comprise the financial system in Australia.

A farm worker gets paid today in money,but waits to spend the money until next week.Which function of money does this illustrate?

Explain whether a cash deposit into a bank is an asset or a liability for the bank.

If the reserve ratio is RR,the simple deposit multiplier is defined as

The Reserve Bank of Australia intervenes in the financial markets mostly to stop interest rates from changing.

Banks can increase the money supply by

Assets are

Which of the following is not a major function of the Reserve Bank of Australia?

If Thrifty Bank receives a $10 000 deposit and keeps 10 per cent of its deposits in reserve,how much will the bank loan out?

Among potential stores of value,money

A barter economy is an economy where

Suppose you deposit $2000 into a bank that has a reserve ratio of 0.1.How does this initially affect the bank's balance sheet?

List the five criteria necessary in order for a good to be suitable as a medium of exchange,and explain whether Australian currency is suitable to use as a medium of exchange.

The reserves of a bank

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

The Reserve Bank of Australia undertakes ________ to manage interest rates to pursue macroeconomic objectives.

Net worth is

M1 includes

A bank's liabilities are

Money is

The ________ the reserve ratio,the ________ the simple deposit multiplier.

Financial markets and financial intermediaries comprise the financial system in Australia.

A farm worker gets paid today in money,but waits to spend the money until next week.Which function of money does this illustrate?

Explain whether a cash deposit into a bank is an asset or a liability for the bank.

If the reserve ratio is RR,the simple deposit multiplier is defined as

The Reserve Bank of Australia intervenes in the financial markets mostly to stop interest rates from changing.

Banks can increase the money supply by

Assets are

Which of the following is not a major function of the Reserve Bank of Australia?

If Thrifty Bank receives a $10 000 deposit and keeps 10 per cent of its deposits in reserve,how much will the bank loan out?

Among potential stores of value,money

A barter economy is an economy where

Suppose you deposit $2000 into a bank that has a reserve ratio of 0.1.How does this initially affect the bank's balance sheet?

List the five criteria necessary in order for a good to be suitable as a medium of exchange,and explain whether Australian currency is suitable to use as a medium of exchange.

The reserves of a bank

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 the reserve ratio,the the simple deposit multiplier.