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5 Written questions

5 Matching questions

  1. Suppose Students Bank and Trust has zero excess reserves. If the required reserve ratio decreases:
  2. Which of the following is not true about money?
  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 $50 million in excess reserves and a required reserve ratio of 10 percent. The deposit-creation potential of the banking system is
  5. When a bank makes a loan:
  1. a Excess reserves will increase by $170,000
  2. b It must be minted by the government in order to have value
  3. c $500 million
  4. d The bank will be able to make more loans
  5. e It creates a transactions-account balance for the borrower

5 Multiple choice questions

  1. Purchase stock
  2. Barter
  3. It transfers money from spenders to savers
  4. A change in the composition of the money supply, but not the size
  5. An individual repays the money that he borrowed from a bank

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. Which of the following is not an essential characteristic of moneyIt is backed by gold or silver


  3. Money creation occurs whenBanks make loans to borrowers


  4. If money is used to transform current income into future purchases, it is functioning as a:Credit card


  5. The term fractional reserves refers toReserves being a fraction of total deposits


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