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Cards In This Set
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Demand deposits (checkable deposits) are money because they serve as
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D) a medium of exchange
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The Federal Open Market Comittee of the Federal Reserve System is primarily responsible for
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C) setting the Fed's monetary policy by direction the buying or selling of governemnt bonds by Federal Reserve Banks.
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In the United States, the money supply designated M1 is compromised of
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A) Federal Reserve Notes, coins, demand deposits and traveler's checks.
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Which of the follwoing statements most accurately describes the twelve Federal Reserve Banks?
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C) They are privately owned and publically controlled central banks whose basic function is to control interest rates and the money supply in order to achieve economic stability for the nation.
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The total demand for money curve will shift to the right as a result of
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A) an increse in nominal GDP.
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The downward, negative slope of the demand for money is best explained in terms of the
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C) the interest rate sensitivity of the asset demand for money.
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The money supply curve is vertical because
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A) the money supply is determined by the Fed and is not interest rate sensitive.
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When cash is deposited in a checking account at a commercial bank, there is
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C) no change in the money supply of the economy
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The Balcones Banks has actual reserved of $9 million and checkable deposits of $30 million. The required reserve ration is 20 percent. The bank's excess reserves are $ Million.
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B) 3
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Money is created when
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B) a commercial bank or credit union loans money.
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The theoretical, maximum amount by which the banking system can expand the money supply of the economy by lending is
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A) $120 billion.
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When a check is drawn and cleared, the
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B) bank against which the check is cleared loses both reserves and depositis equal to the amount of the check.
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When the Fed purchases governemnt securities from the public
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C) the money supply will increase.
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The Federal Reserve System
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E) all of the above
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When the Fed purchases securities from a bank, bank reserves___and the money supply___ .
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C) increses; remains unchanged
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