WK 4 CH 16 QUIZ

Ace your homework & exams now with Quizwiz!

A bank has $50 in reserves, $30 in excess reserves and $70 in deposits. Because of this, it has how much M1 money?

$ 70.00

In the special case of the 100-percent reserve banking the money multiplier is

1 and banks do not create money.

Metropolis National Bank is currently holding 2% of its deposits as excess reserves.

10 percent reserve requirement

The manager of the bank where you work tells you that your bank has $6 million in excess reserves. She also tells you that the bank has $400 million in deposits and $362 million dollars in loans. Given this information you find that the reserve requirement must be

32/400

A bank's reserve ratio is 5 percent and the bank has $2,280 in reserve. Its deposits amount to

45,600

A bank has an 8 percent reserve requirement, $10,000 in deposits, and has loaned out all it can given the reserve requirement.

800 in reserves and 9,200 in loans

Which of the following is correct?

A bank's deposits at the Federal Reserve counts as part of the bank's reserves. The Federal Reserve pays interest on these deposits.

In a 100-percent-reserve banking system, if people decided to decrease the amount of currency they held by increasing the amount they held in checkable deposits, then

M1 would not change

According to the article "Why Gold?', silver may be used as money. One problem with using silver as money is that

Silver tarnishes over time

Which of the following is correct?

The amount of money in the economy depends in part on the behavior of banks.

Which of the following best illustrates the concept of a store of value?

You keep 6 oz of gold in your Sade deposit box at the bank for emergencies

When a bank fails to meet the reserve requirement by the end of its operating hours, it can meet the requirement by

borrowing overnight from other banks

Which of the following items is not included in the most narrow definition of money, M1?

certificates of deposit

Which of the following can the Fed do to change the money supply?

change reserves or the ratio

M1 includes

currency, demand deposits, travelers checks

Refer to Table 29-6. From the table, it follows that the Bank of Pleasantville operates in a Assets-- Reserves: 3,000. Loans: 47,000 Liabilities-- Deposits:50,000

fractional-reserve banking system, since its reserves are less than its deposits.

Fiat money

has no intrinsic value

When the Fed conducts open-market purchases

it buys Treasury securities, which increases the money supply.

Bank Is insolvent when

its capital (ownder's equity) is negative

Banks create money when they

make loans

Suppose banks decide to hold fewer excess reserves relative to deposits. Other things the same, this action will cause the

money supply to rise. To reduce the impact of this the Fed could sell Treasury bonds.

M1 includes

other checkable deposits

Banks

pay depositors interest

The federal reserve

serves as a lender of last resort

The measure of the money stock called M1 includes

wealth held by people in their checking accounts.


Related study sets

Chapter 2: Ethics and Standards of Practice Issues

View Set

US History - FDR and the New Deal

View Set

Chapter 23: Management of Patients with Chest and Lower Respiratory Tract Disorders

View Set

Ancient Times (Historical Antecedents in the Course of Science and Technology)

View Set

OpenStax Bone Tissue & the Skeletal System

View Set

Chapter 9: Groups in the Organization

View Set