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5 Written questions

5 Matching questions

  1. Which of the following is not an essential characteristic of money
  2. Which of the following has not served as a form of money for the United States
  3. 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:
  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. One HEADLINE article in the text is titled "Goods Replace Rubles in Russia's Vast Web of Trade". According to this article, the Russian currency:
  1. a $5 billion
  2. b Eggs
  3. c It is backed by gold or silver
  4. d Is falling in value
  5. e Excess reserves will increase by $170,000

5 Multiple choice questions

  1. Amount of loans a bank can make after meeting the reserve requirement
  2. Put it in a savings account so you can buy a new car next summer
  3. $45,000
  4. Make new loans
  5. Credit card

5 True/False questions

  1. Suppose the entire banking system has $70,000 in excess reserves and a required reserve ratio of 25 percent. The deposit-creation potential of the banking system is$50,000


  2. BarterIt creates a transactions-account balance for the borrower


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


  4. Excess reserves are calculated as:Bank reserves to total transaction deposits


  5. Suppose Caroline finds $10,000 under her bed and deposits it in her checking account. If the required reserve ratio is 25 percent, this deposit has the potential of increasing the money supply byDoes not change in value