Macro Chapter 16 help
suppose joe changes his 1000 demand deposit from bank a to bank b if the reserve requirement is 10% what is the potential change in demand deposits as a result of joes action
0
if the reserve ratio is 25% the value of the money multiplier is
4
Suppose the Fed purchases a 1000 government bond from you. If you deposit the entire 1000 in your bank what is the total potential change in the money supply as a result of the feds action if reserve requirements are 20%
5000
which of the following statements about a bank's balance sheet is true
assets minus liabilities equals capital
which of the following policy combinations would consistently work to increase the money supply
buy government bonds decrease reserve requirements decrease the discount rate
the M1 money supply is composed of
currency demand deposits traveler's checks and other checkable accounts
Required reserves of banks are a fixed percentage of their
deposits
commodity money
has intrinsic value
the Fed's tools of monetary control are
open-market operations, lending to banks, reserve requirements, and paying interest on reserves
an example of fiat money is
paper dollars
which of the following is not a function of money
protection against inflation
which of the following policy actions by the fed is likely to increase the money supply
reducing reserve requirements
The Board of Governors of the Federal Reserve System consists of
seven members appointed by the president
To insulate the federal reserve from political pressure
the Board of Governors are appointed to fourteen year terms
the discount rate is
the interest rate the fed charges on loans to banks
If banks increase their holdings of excess reserves
the money multiplier and the money supply decrease
a decrease in the reserve requirement causes
the money multiplier to rise
Suppose all banks maintain a 100 percent reserve ratio. if an individual deposits 1000 of currency in a bank
the money supply is unaffected
If the Fed engages in an open market purchase and at the same time it raises reserve requirements
we cannot be certain what will happen to the money supply
which of the following statements is true
when the fed sells government bonds the money supply dcreases
