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Q 1/41
Score 0
All of the following are true regarding money except
30
Money measures relative values when it serves as a unit of account
Inflation erodes money's ability to serve as a store of value
Commodity money is used more than fiat money today
Money is used as a medium of exchange
Q 2/41
Score 0
Which of the following is true regarding the balance sheet of a commercial bank?
30
Demand deposits are considered a liability
Loans from the Federal Reserve are considered an asset
Savings accounts are considered an asset
Banks make a profit when the value of their assets are greater than the value of their liabilities.
41 questions
Q.
All of the following are true regarding money except
1
30 sec
Q.
Which of the following is true regarding the balance sheet of a commercial bank?
2
30 sec
Q.
Which of the following best explains why the money demand curve is downward sloping?
3
30 sec
Q.
A decrease in the supply of money will cause which of the following?
4
30 sec
Q.
Which of the following is the best example of fractional reserve banking?
5
30 sec
Q.
The require reserve ratio is 10% and the central bank sells $2 million in bonds to banks. If banks loan out all their excess reserves and there are no leakages, what will happen to the money supply?
6
30 sec
Q.
Suppose that all banks hold no excess reserves and the reserve requirement is 20%. If Paula deposits $200 she earned for babysitting in the bank, what is the maximum increase in the total money supply?
7
30 sec
Q.
Which of the following is true regarding the central banks use of open market operations?
8
30 sec
Q.
Which of the following is an appropriate monetary policy used by central bank to reduce inflation?
9
30 sec
Q.
Which of the above combined policies is the most effective in decreasing unemployment?
10
30 sec
Q.
Which of the following is true regarding the federal funds rate?
11
30 sec
Q.
The Federal Reserve can increase the federal funds rate most effectively by
12
30 sec
Q.
Assume that the nominal interest rate that a bank charged is 7% and the expected inflation rate was %5. If the actual inflation rate turned out to by 11%, what is the expected real interest rate and the actual real interest rate?
13
30 sec
Q.
If businesses predict that the economy will improve and sales will increase in the future, which of the following will occur in the loanable funds market?
14
30 sec
Q.
Which of the following is the best example of the crowding-out effect?
15
30 sec
Q.
"The price for a tike to the Super Bowl is $500." This statement best illustrates money used as a
16
30 sec
Q.
If you use money as a store of value, you would be
17
30 sec
Q.
which of the following is NOT part of M1
18
30 sec
Q.
Which of the following will most likely occur in an economy if more money is demanded than is supplied?
19
30 sec
Q.
Which of the following is true for the money market graph?
20
30 sec
Q.
Fractional reserve banking means that banks are required to
21
30 sec
Q.
Banks may not be able to create the maximum amount of money from a new deposit as a result of
22
30 sec
Q.
When an economy is a full employment, an expansionary monetary policy will lead to
23
30 sec
Q.
If the Federal Reserve raises the discount rate, how are interest rates and real GDP affected?
24
30 sec
Q.
To eliminate an inflationary gap, the Federal Reserve might
25
30 sec
Q.
the Federal Reserve can increase the money supply by
26
30 sec
Q.
If the Federal Reserve conducts an open market purchase of bonds, we can expect which of the following to occur in the short-run?
27
30 sec
Q.
When consumers hold money rather than bonds because they expect the interest rate to increase in the future, they are holding money for what purposes?
28
30 sec
Q.
If on receiving a checking deposit of $500 a bank's excess reserves increased by $400, the required reserve must be
29
30 sec
Q.
Assume the required reserve ration is .2. If a bank initially has no Excess Reserves and $100,000 cash is deposited in the bank, the maximum amount by which this bank may increase its loans is
30
30 sec
Q.
Which of the above is(are) an asset for the ACDC Bank
31
30 sec
Q.
If required reserves is 10% and that bank receives a new demand deposit of $300. which of the above will most likely occur in the bank's balance sheet?
32
30 sec
Q.
The Federal Reserve can change the US money supply by
33
30 sec
Q.
Open market operations refer to which of the following activities?
34
30 sec
Q.
An open market purchase of bonds by the Fed will most likely change the money supply, the interest rate and the unemployment rate in which of the following ways?
35
30 sec
Q.
The federal funds rate is the interest rate that
36
30 sec
Q.
If the Fed institutes a policy to reduce inflation, which of the following is most likely to increase?
37
30 sec
Q.
If the supply for loanable funds increases, what will happen to real interest rates and investment?
38
30 sec
Q.
When government spending causes an increase in real interest rates, gross private domestic investment
39
30 sec
Q.
Suppose business are fearful that there will be a recession in the near future. Which of the above best describes the impact of this belief on demand for loanable funds and interest rates?
40
30 sec
Q.
Assume that a perfectly competitive financial market for loanable funds is in equilibrium. Which of the following is most likely to occur to the quantity demanded and the quantity supplied of loanable funds if the government puts a cap (ceiling) on the interest rate?
