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5 Written Questions

5 Matching Questions

  1. Suppose a bank has $1,000,000 in deposits and a minimum reserve requirement of 20 percent. Then required reserves are
  2. Suppose a bank has $200,000 in deposits and a minimum reserve requirement of 15 percent. Then required reserves are:
  3. Which of the following has not served as a form of money for the United States
  4. Suppose the entire banking system has a required reserve ratio of 0.20. How much can the money supply increase in response to a $1 billion increase in excess reserves for the whole banking system?
  5. Which of the following functions like money but is not included in M1?
  1. a Eggs
  2. b Money-market mutual funds
  3. c $5 billion
  4. d $200,000
  5. e $30,000

5 Multiple Choice Questions

  1. Savings accounts
  2. Is falling in value
  3. Reserves being a fraction of total deposits
  4. Currency, transactions accounts and traveler's checks
  5. $70,000

5 True/False Questions

  1. If excess reserves are $50,000, demand deposits are $1,000,000 and the minimum reserve requirement is 5 percent, then total reserves are:$45,000


  2. If money is used to transform current income into future purchases, it is functioning as a:Store of value


  3. Banks do all of the following except:Banks make loans to borrowers


  4. Which of the following does not constrain deposit creation?The decision by the Federal Reserve to reduce the minimum reserve requirement


  5. Money is functioning as a standard of value when youUse it to compare two houses in different price ranges


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