murgo final part7

152. In September 2013, the Federal Open Market Committee said it would wait for more evidence that progress had been made on the economic recovery before it cut back on open market purchases. The Bureau of Economic Analysis did not release its advanced estimate of the third quarter's GDP growth until a month after the quarter ended. The second estimate was released two months after the quarter ended, and a third revised estimate was released about three months after the quarter ended. This wait for accurate data to be collected is known as the: A) information lag. B) recognition lag. C) decision lag. D) implementation lag

A) information lag.

155. Assume that the reserve requirement is 20% and the Federal Open Market Committee buys a $10,000 bond. The impact on the banking system is a(n): A) injection of $10,000 in new reserves. B) reduction of $50,000 in reserves. C) injection of $50,000 in new reserves. D) injection of $2,000 in new reserves.

A) injection of $10,000 in new reserves.

159. A bank has excess reserves of $4,000 and demand deposits of $40,000; the reserve requirement is 20%. If the reserve requirement is increased to 25%, the maximum amount of new loans this bank can make is: A) $1,500. B) $2,000. C) $2,500. D) $3,000.

B) $2,000.

157. Assume the reserve requirement is 25% and the Federal Open Market Committee buys $4 million of U.S. government bonds from the public. As a result of this transaction the supply of money is: A) not directly affected but has the potential to be increased by a total of $12 million. B) directly increased by $4 million and has the potential to be increased by another $12 million. C) directly reduced by $4 million and has the potential to be reduced by another $12 million. D) directly increased by $4 million and has the potential to be increased by another $8 million.

B) directly increased by $4 million and has the potential to be increased by another $12 million.

154. Suppose a bank has $1 million in deposits, a reserve requirement of 20%, and bank reserves of $400,000. The bank has excess reserves of: A) $50,000. B) $100,000. C) $200,000. D) $300,000.

C) $200,000.

151. In February 2010, the Central Bank of Brazil raised reserve requirements. By raising reserve requirements, Brazil was attempting to: A) increase its money supply. B) stabilize its money supply. C) decrease its money supply. D) improve the liquidity of its banks.

C) decrease its money supply.

153. Which of the following lists represents monetary policy actions that are consistent with one another? A) buy government bonds, raise reserve requirements, raise the discount rate B) sell government bonds, raise reserve requirements, lower the discount rate C) sell government bonds, raise reserve requirements, raise the discount rate D) buy government bonds, lower reserve requirements, raise the discount rate

C) sell government bonds, raise reserve requirements, raise the discount rate

158. A bank has excess reserves of $5,000 and demand deposits of $40,000; the reserve requirement is 20%. If the reserve requirement is increased to 25%, the maximum amount of new loans this bank can make is: A) $1,500. B) $2,000. C) $2,500. D) $3,000

D) $3,000

160. Assume the reserve requirement is 10%. If the Federal Open Market Committee buys a $10,000 bond from Bank A, Bank A's reserves: A) decrease by $10,000. B) increase by $9,000. C) increase by $1,000. D) increase by $10,000.

D) increase by $10,000.

156. Assume that the reserve requirement is 20% and the Federal Open Market Committee buys a $100,000 bond. The money supply: A) increases by a maximum of $100,000. B) decreases by $100,000. C) increases by a maximum of $20,000. D) increases by a maximum of $500,000

D) increases by a maximum of $500,000