Exam 10: The Money Supply and the Federal Reserve System

Since they must lend money to make money,all banks are necessarily insolvent.

Which of the following is an example of fiat money?

The multiple by which total deposits can increase for every dollar increase in reserves is the

When a bank has no excess reserves,and thus can make no more loans,it is said to be

The M2 definition of money includes demand deposits.

The Chair of the Fed also serves as one of the Reserve Bank Presidents.

Money is anything that generally is accepted as a medium of exchange.

Electro City,a retailer of electronics,has 2,000 different products in inventory.Electro City reports its inventory is worth $12 million.This is an example of using money as a

The Bank of Red Oak has $2 million in deposits and $400,000 in reserves.If excess reserves are equal to $100,000,the required reserve ratio is

Fiat money is money the government says is money.

Refer to the information provided in Table 10.1 below to answer the questions that follow. Table 10.1 -Refer to Table 10.1.The required reserve ratio is 25%.If the First Charter Bank is meeting its reserve requirement and has no excess reserves,its reserves equal

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

Of the tools available to the Fed to regulate the money supply,which is the least used?

Refer to the information provided in Table 10.2 below to answer the questions that follow. Table 10.2 -Refer to Table 10.2.First Commercial Bank's total loans equal

Among the assets of commercial banks are demand deposits.

Currency debasement occurs when

Only the required reserve ratio determines how much money the Federal Reserve can create.

Which of the following instruments is NOT used by the Federal Reserve to change the money supply?

Which of the following statements is FALSE?

Which of the following represents an action by the Federal Reserve that is designed to increase the money supply?