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5 Written questions

5 Matching questions

  1. When an individual deposits cash or coins in a transactions account, there is
  2. Banks do all of the following except:
  3. The smallest component of the basic money supply is in the form of
  4. Suppose the entire banking system has $50 million in excess reserves and a required reserve ratio of 10 percent. The deposit-creation potential of the banking system is
  5. If there is only one bank in an economy:
  1. a A change in the composition of the money supply, but not the size
  2. b $500 million
  3. c Reserves never leave the bank
  4. d Traveler's checks
  5. e Purchase stock

5 Multiple choice questions

  1. It creates a transactions-account balance for the borrower
  2. $80,000
  3. Aggregate demand
  4. Buy lunch at a fast food restaurant for yourself and your friend
  5. Excess reserves will increase by $170,000

5 True/False questions

  1. Refer to Table 13.2. With a required reserve ratio of 12 percent, Bank of the Universe would have excess reserves of:$30,000


  2. If total reserves for a bank are $25,000, excess reserves are zero and demand deposits are $100,000, then the money multiplier must be:10


  3. The basic money supply includesCurrency, transactions accounts and traveler's checks


  4. Suppose a bank has $50,000 in transactions accounts and a minimum reserve requirement of 10 percent. Then required reserves are$30,000


  5. Suppose a bank has $200,000 in deposits and a minimum reserve requirement of 15 percent. Then required reserves are:$200,000