Chapter 14

When banks borrow from and lend reserves to each other, they are participating in the _____ market.

federal funds

Currency in the United States today is _____ money.

flat

If it looks as if a bank won't meet the Federal Reserve Bank's reserve requirement, normally it will first turn to the:

other member banks and borrow money at the federal funds rate.

All assets that are included in M1 are also included in M2

True

Which of the following assets is the MOST liquid?

a $50 bill

Which of the following is NOT one of the main features used presently to protect depositors and the economy against bank runs?

interest rate ceilings on checkable deposits.

All of the following are roles of money presented in the book, EXCEPT money as a:

measure of wealth.

The major tools of monetary policy available to the Federal Reserve System include:

reserve requirements, open-market operations, and the discount rate

Decisions about monetary policy are made by

the Federal Open Market Committee

Trade without money requires a double coincidence of wants (i.e. barter).

true