Econ test 3

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The member of the federal reserve board of governors ?

Are appointed by the president of the U.S. and confirmed by the U.S. senate

An open market sale ?

Decreases the number of dollars and the number of bonds in the hands of the public

Look in your wallet your credit cards are ?

M1

which of the following lists is included in what economists call ''money''?

cash

when fed wishes to reduce the economy's money supply it ?

cells some of its government securities

which list ranks asset is from most to least liquidity ?

currency, stocks, fine art

The federal open market committee meets approximately ?

every six weeks

An individual bank can lead out at most its ?

excess reserves

the interest rate on loans made by banks in the market in which they lend and borrow reserves form each other for very short periods of time is known as the?

federa funds rate

the feds principal decision making body where the fed exercises monetary control over the economy through a 12 person committee that includes all 7 member of the board of governors, is known as the ?

federal open market committee

currently, u.s. currency is ?

fiat money with no intrinsic value

If the legal reserve requirement decreases, the ?

money multiplier increases

liquidity refers to ?

the ease with which an asset is converted to the medium of exchange

people learn to hold a specific quantity of money to purchase groceries, movie tickets, gas, clothes, film, and other items they habitually buy. this demand for money serves their ?

transactions motive

if a bank desires to hold no excess reserves and has just enough reserves to meet the required reserve ratio of 15% receives a deposit of 600 dollars it has a

$510 increase in excess reserves and a $90 increase in required services

when the income multiplier is 3 the marginal propensity to save is ?

.33

when national income increases from 300 billion to 400 billion, nation consumption increases from 300 billion to 360 billion at y= 400 billion mpc is ??

0.6

in exhibit u-3, when total income increases from 1000 to 2000 the marginal propensity to consume is ?

0.8

If $30 billion in new investment is added to the economy and MPC is 0.9, national income would increase by ?

300 b

if $30 billion in new investment is added to the economy and mac is 0.9 national income would increase by?

300 billi

if the marginal propensity to consume is equal to 0.8, the addition of 60 billion in aggregate expenditure will increase national income by ?

300 billion

A central banks setting (or altering) of the money supply is known as ?

Monetary policy

The major assets and liabilities of a bank are ?

Reserves, demand deposits , and respectively. in order

If a bank has a reserve ratio of 8% , then ?

The bank keeps 8% of its deposits as reserves and loans out the rest

the agency responsible for regulating the money supply in the u.s. is ?

The federal reserve

when in france you notice that prices are posted in euros, this best illustrates moneys function as ?

a unit of account

The board of governors ?

has 7 members

The money supply known as M3 ?

includes m2+ large denomination time deposits and repurchase agreements

which of the following is a bank liability ?

loans

you pay for cheese and bread from the deli with currency which function of money does this best illustrate ?

medium of exchange

The federal reserve system?

pursues an independent monetary policy that can conflict with governments fiscal policy

The regional federal reserve banks ?

regulate bank in their region

which of the following is not included in M1 ?

savings deposit

Dollar bills, rare paintings, and emerald necklaces are all ?

store value

which of the following is not part of the federal reserve system?

treasury department

which of the following is a function of money?

unit of account, a store value, and medium of exchange

the federal reserve ?

was created in 1913 , is the U.S. central bank, has other duties in addition to controlling the money supply

the measure of the money stock called m1 includes ?

wealth held by people in their checking accounts.


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