Ch-27 (10) The Money and Banking

Smith Bank has $15 million in deposits, $2 million in loans, $8 million in bonds and $4 million in reserves. What is the bank's net worth?

$-1 million

Bob Bank has $5 million in reserves, $16 million in deposits, $6 million in bonds and $4 million in loans. What is the bank's net worth?

$-1million

The table below shows the components of M1 and M2 in the U.S. Use the table to calculate Total M1. Round to the nearest third decimal place. Components of M1 and M2 in the U.S. $ trillions Currency $1.2 Traveler's checks $0.004 Demand deposits/other checking accounts $2.204 Savings accounts $9.805 Time deposits $0.527 Individual money market mutual fund balance $1.176

$13.213 trillion

The Federal Reserve System is responsible for tracking the amounts of M1and M2 and prepares a weekly release of information about the money supply. The table below shows the U.S. money stock components of M1 and M2. Use the table to calculate Total M2. Round to the third decimal place. Components of M1 and M2 in the U.S. $ trillions Currency $1.456 Individual market mutual fund balances $0.764 Demand deposits/other checking accounts. $3.125 Savings accounts $8.475 Traveler's checks $0.003 Time deposits $0.492

$14.315 trillion

The Federal Reserve System is responsible for tracking the amounts of M1 and M2 and prepares a weekly release of information about the money supply. The table below shows the U.S. money stock components of M1 and M2. Use the table to calculate Total M1. Round to the third decimal place. Components of M1 and M2 in the U.S. $ trillions Currency $3 Individual market mutual fund balance $0.764 Demand deposits/other checking account $3.1 Savings accounts $8.475 Traveler's checks $0.004 Time deposits. $0.492

$14.579 trillion

The table below shows the components of M1 and M2 in the U.S. Use the table to calculate Total M2. Round to the third decimal place. Components of M1 and M2 in the U.S. $ trillions Currency $3 Individual market mutual fund balances. $0.764 Demand deposits/other checking account $3.1 Savings accounts $8.475 Traveler's checks $0.004 Time deposits $0.492

$15.835 trillion

The table below shows the components of M1 and M2 in the U.S. Use the table to calculate Total M1. Round your answer to the nearest two decimal places.

$20.98 trillion

The Federal Reserve System is responsible for tracking the amounts of M1 and M2 and prepares a weekly release of information about the money supply. The table below shows the U.S. money stock components of M1 and M2. Use the table to calculate Total M1. Round to the third decimal place.

$4.584 trillion

The table below shows the components of M1 and M2. Use the table to calculate Total M1. Present the result in trillions and round to third decimal point.

$8.404 trillion

Sam Bank has $4 million in reserves, $11 million in deposits, $4 million in bonds and $15 million in loans. What is the bank's net worth?

12 million

The T-account below represents assets and liabilities for a bank. Use the T-account to calculate the bank's net worth. Express your answer in millions.

2 million

The T-account below represents assets and liabilities for a bank. Use the T-account to calculate the bank's bonds. Assets Liabilities + Net Worth Loans $9 million Deposits $18 million Bonds ? Reserves $5 million Net Worth −$1 million

3 million

Which of the following is not an asset? A debt or something you owe. Something of value that is owned and can be used productively. Reserves of money held in the form of cash in the bank vaults. A holding of government treasuries by a bank.

A debt or something you owe.

Which is the best definition of liability? A liability is an amount of debt owed by a firm or an individual. A liability is an institution that operates between a saver with financial assets to invest and an entity that will borrow those assets and pay a rate of return. A liability is an item of value owned by a firm or an individual. A liability is a fund that a bank keeps on hand that is not loaned out or invested in bonds.

A liability is an amount of debt owed by a firm or an individual.

A cost associated with finding a lender or a borrower for money is called ________________________. a production cost a bank cost a transaction cost an intermediary cost

A transaction cost

Which of the following is the definition of transaction cost? A transaction cost is a cost associated with finding a lender or a borrower for money. A transaction cost is an item of value owned by a firm or an individual. A transaction cost is a fund that a bank keeps on hand that is not loaned out or invested in bonds. A transaction cost is an amount of debt owed by a firm or an individual.

A transaction cost is a cost associated with finding a lender or a borrower for money

In addition to being "a unit of account," which of the following is a function of money? It serves as a standard of deferred payments. It serves as a medium of exchange. It serves as a store of value. All of the above

All of the above

M2 is calculated by adding together time deposits, certificates of deposit, checking and savings deposits, and ___________. traveler's checks money market mutual funds currency all the above

All of the above

The M2 definition of money supply includes: currency checking accounts and travelers checks savings deposits, money market funds, and certificates of deposit all of the above

All of the above

Banks use deposits to purchase __________. bonds savings capital liabilites

Bonds

Which of the following is a depository institution? Commercial bank Pension fund Mutual fund Insurance company

Commercial bank

What term is best defined as a checkable deposit in a bank that is available by making a cash withdrawal or writing a check? Money market fund Demand deposit Savings deposit Time deposit

Demand deposit

Banks increase transaction costs when they act as financial intermediaries. True False

False

Bonds are considered a liability for a bank because banks will receive a stream of payments on bonds in the future. True False

False

Loans are considered a liability to banks because they are not guaranteed to get the money back. True False

False

True or false? M2 is calculated by adding together time deposits, savings deposits, and money market funds. TRUE FALSE

False

Which of the following is part of M1? I. currency in a bank's vault II. cash in your wallet III. checkable deposits IV. traveler's checks II, III, and IV I, II, III, and IV I, II, and III II and III

II, III, and IV

M2 is calculated by adding together time deposits, certificates of deposit, and ___________. Select all that apply. M1 money supply money market mutual funds credit card purchases debit card purchases

M1 money supply money market mutual funds

Which of the following is the money supply that includes currency, checkable deposits, traveler's checks, savings deposits, money market funds, and certificates of deposit? overall money supply M0 money supply M2 money supply M1 money supply

M2 money supply

Which of the following components are used to calculate M1? Select all that apply. Savings accounts Currency Traveler's checks Time deposits

Savings accounts Currency Traveler's checks

Which of the following components are used to calculate M1? Select all that apply. Savings accounts Currency Traveler's checks Time deposits

Savings accounts Currency Traveler's checks

You can store a certain amount of money on a _______ which can be used to make specific purchases at specific places. debit card smart card credit card None of the above

Smart card

Cards which can store a certain value of money to be used for purchases such as a calling card or a gift card are called: credit cards debit cards smart cards all of the above

Smart cards

Which of the following is an account that the depositor has committed to leaving in the bank for a certain period of time in exchange for a higher rate of interest? savings deposit demand deposit money market fund time deposit

Time deposit

A balance sheet is an accounting tool that lists assets and liabilities. True False

True

A demand deposit is a checkable deposit in a bank that is available by making a cash withdrawal or writing a check. True False

True

Bonds are considered an asset to banks because banks will receive a stream of payments on bonds in the future. True False

True

When you make a purchase on a credit card, it is considered a short term loan. True False

True

Which of the following is an example of commodity money? a gold bar cigarettes used in POW camps a silver coin all of the above

all of the above

Examples of smart cards include _________ calling cards debit cards gift cards credit cards

calling cards gift cards

Buying a good through barter means? paying for it with money paying for it with credit exchanging it for another good or service all of the above

exchanging it for another good or service

The asset-liability time mismatch, which can cause severe problems for a bank, refers to the possibility for customers to withdraw a bank's liabilities _____________________ while customers repay its assets __________________. at a predictable and consistent rate over time; at an unpredictable and inconsistent rate over time in the long term; in the short term in the short term; in the long term in small amounts; in large amounts

in the short term; in the long term