Test 3 Review_Ch 29 30
Quiz by Chen, Clara
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- Q1
The Monetary Policy of Tazi is controlled by the country's central bank known as the Bank of Tazi. The local unit of currency is the Tazian dollar. Aggregate banking statistics show that collectively the banks of Tazi hold $300 million of required reserves, $75 million of excess reserves, have issued $7,500 million of deposits, and hold $225 million of Tazian Treasury bonds. Tazians prefer to use only demand deposits and so all money is on deposit at the bank.
Refer to Scenario 29-1. Assuming the only other thing Tazian banks have on their balance sheets is loans, what is the value of existing loans made by Tazian banks?
$6,700 million
$6,900 million
$7,350 million
$7,125 million
300s - Q2
A bank loans Kellie's Print Shop $350,000 to remodel a building near campus to use as a new store. On their respective balance sheets, this loan is
a liability for the bank and an asset for Kellie's Print Shop. The loan increases the money supply.
an asset for the bank and a liability for Kellie's Print Shop. The loan increases the money supply.
a liability for the bank and an asset for Kellie's Print Shop. The loan does not increase the money supply.
an asset for the bank and a liability for Kellie's Print Shop. The loan does not increase the money supply.
300s - Q3
If the Federal Reserve increases the interest rate on bank deposits at the Fed, banks will want to hold
fewer reserves, so the reserve ratio will fall.
more reserves, so the reserve ratio will fall.
fewer reserves, so the reserve ratio will rise.
more reserves, so the reserve ratio will rise.
300s - Q4
Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases
the inflation rate but not the nominal interest.
the inflation rate and the nominal interest rate by the same number of percentage points.
nominal interest rates but by less than the percentage point increase in the inflation rate.
neither the inflation rate nor the nominal interest rate.
300s - Q5
Type of Money Amount (Billions of dollars)
Large time deposits 120
Small time deposits 80
Demand deposits 300
Other checkable deposits 50
Savings deposits 65
Traveler's checks 5
Money market mutual funds 200
Currency 150
Credit card balances 300
Miscellaneous categories of M2 30
What is the M1 and M2?
$585; $580
$505; $880
$505; $1,000
$570; $1,300
300s