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5 Written Questions

5 Matching Questions

  1. change in money demand curve
  2. goods market
  3. excess reserves
  4. barter
  5. interest
  1. a fee borrowers pay to lenders for the use of their funds
  2. b market where goods and services are exchanged and the equilibrium level of the Aggregate Output (y) is determined
  3. c difference b/w a bank's actual reserves and its required reserves; how much they can loan/ incr. money supply
    excess=actual-RR
  4. d direct exchange of goods and services for other goods and services; must have a "double coincidence of wants"
  5. e incr. money demand = incr. interest rates and vice versa; proportional

5 Multiple Choice Questions

  1. annual interest payment on a loan EXPRESSED AS A % OF THE LOAN
    ex: $100 interest/$1000 bond = 10%
  2. an asset that can trasnport purchasing power from one time period to another; earn income in the present and spend it in the future
  3. banks and other institutions that act as a link b/w those who have money to lend and those who want to borrow money
  4. incr. money supply = decr. interest rates and vice versa; inversely proportional
  5. negative net worth

5 True/False Questions

  1. currency debasementmoney serves asw a consistent way of quoting prices; allows us to compare relative values easily (money should be divisible)

          

  2. moral suasioninfluence; pressure exerted by the Fed on member banks to discourage them from borrowing heavily

          

  3. FDIC (Federal Deposit Insurance Corporation)created in 1933 and insures deposits in banks

          

  4. money marketmarket where goods and services are exchanged and the equilibrium level of the Aggregate Output (y) is determined

          

  5. reservesfee borrowers pay to lenders for the use of their funds

          

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