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5 Written questions

5 Matching questions

  1. Initially a bank has a minimum reserve requirement of 15 percent and no excess reserves. If $200,000 is deposited in the bank, then ceteris paribus:
  2. Constraints on deposit creation include all of the following except:
  3. Suppose the entire banking system has $10 million in excess reserves and a required reserve ratio of 5 percent. The deposit-creation potential of the banking system is:
  4. Excess reserves are calculated as:
  5. Suppose Students Bank and Trust has zero excess reserves. If the required reserve ratio decreases:
  1. a The bank will be able to make more loans
  2. b An increase in the money multiplier
  3. c Total reserves minus required reserves
  4. d $200 million
  5. e Excess reserves will increase by $170,000

5 Multiple choice questions

  1. Currency, transactions accounts and traveler's checks
  2. $20,000
  3. Traveler's checks
  4. $80,000
  5. Pools of money used to buy interest-bearing bonds

5 True/False questions

  1. When an individual deposits cash or coins in a transactions account, there isA change in the composition of the money supply, but not the size


  2. Which of the following has not served as a form of money for the United StatesEggs


  3. Which of the following does not occur when a bank makes a loan?It transfers money from spenders to savers


  4. The overwhelming majority of the basic money supply in the U.S. is in the form ofTransactions accounts and currency in circulation


  5. Use the following balance sheet for Bank of the Universe, which is one of many banks in a banking system.
    Table 13.2—Bank of the Universe Balance Sheet

    Refer to Table 13.2. With a required reserve ratio of 10 percent, Bank of the Universe can make new loans in the amount of:


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