X

Report a problem



Monetary Policy

Number of questions: 29

This is a preview. Unlock all the questions and answers for just $9.99.

Buy now
1) If the reserve ratio desired by banks is 0.1, then an open market Fed purchase of $10,000 will
  1. increase the money supply by $100,000
  2. increase the money supply by $5,000
  3. decrease the money supply by $100,000
  4. decrease the money supply by $10,000
 2) the required reserve ratio specifies the ratio of reserves to
  1. vault cash
  2. the total money supply
  3. loans
  4. deposits
 3) the balanced budget multiplier is less than 1, if
  1. prices are variable
  2. if the government maintains a balanced budget
  3. if G rises and T falls equally
 4) if a bank that was previously loaned up receives a deposit of $1,000 and the required reserve ratio is 0.2, then the maximum amount by which total deposits in the economy can increase is
  1. $800
  2. $75
  3. $80
  4. $25
 5) if the banking system gets $1,000 in new reserves from the Fed and the required reserve ratio is 0.2, then the maximum amount by which total deposits in the economy can increase is
  1. $5,000
  2. $4,000
  3. $2,500
  4. $80
 6) if the required reserve ratio is 0.1 and the reserve ratio that banks desire to maintain is 0.2, then the deposit multiplier is
  1. 6.67
  2. 10
  3. 8.3
  4. 5
 7) if the government borrows more money
  1. U.S. bond prices rise
  2. U.S. interest rates rise
  3. demand for U.S. government bonds rises
  4. all of the above
 8) a bank account that can be accessed by writing a check is called a
  1. demand deposit
  2. cash deposit
  3. savings deposit
  4. automatic deposit
 9) an increase in market interest rates will
  1. reduce prices of all bonds
  2. reduce prices of government bonds
  3. reduce prices of municipal bonds
  4. increase prices of all bonds
 10) the central bank of the United States is the
  1. FDIC
  2. Federal Reserve System
  3. Bank of America
  4. Bank of the United States
 11) If the minimum reserve requirement ratio is 0.2, then an open market Fed sale of $10,000 will
  1. increase the money supply by $100,000
  2. decrease the money supply by $100,000
  3. increase the money supply by $10,000
  4. decrease the money supply by $50,000
 12) suppose the balanced budget multiplier is one, then it will be less than one if
  1. savings are close to zero
  2. if prices are not constant
  3. if G rises and T falls equally
 13) if the banking system gets $1,200 in new reserves from the Fed and the required reserve ratio is 0.2, then the maximum amount by which total deposits in the economy can increase is
  1. $5,000
  2. $6,000
  3. $2,500
  4. $80
 14) if the bank that was previously loaned up receives a deposit of $1,200 and the required reserve ratio is 0.2, then the maximum amount of this $1,200 that the bank can lend is
  1. $800
  2. $960
  3. $80
  4. $240
 15) if the required reserve ratio is 0.1 and the reserve ratio that banks desire to maintain is 0.25, then the deposit multiplier is
  1. 6.67
  2. 10
  3. 4
  4. 5
 16) if inflation is strong, then the right Fed policy is to
  1. sell government bonds
  2. lower U.S. interest rates
  3. both a and b
 17) if the wage gap rises,
  1. debt must rise to preserve jobs
  2. profits go up
  3. all of the above
  4. both a and b
 18) Monetary base includes
  1. cash held by the people
  2. cash held by the federal government
  3. cash held by banks
  4. all of the above
 19) If the U.S. trade deficit rises, and foreign investment rises as a result then
  1. U.S. bond prices rise
  2. U.S. interest rates fall
  3. demand for U.S. government bonds rises
  4. all of the above
 20) M 1 includes
  1. cash held by the people
  2. cash held by the federal government
  3. cash held by the government of Dallas
  4. All of the above
 21) If the banking system gets $1500 in new reserves from the Fed & the required-reserve ratio is 0.25, then the maximum amount by which total loans in the economy can increase is
  1. $6,000
  2. $4,500
  3. $4,800
 22) If a bank that was previously loaned up receives a deposit of $1000, its own reserve requirement ratio is 0.3 and the required-reserve ratio is 0.25, then the maximum amount of this $1,000 that this bank will lend is
  1. $800
  2. $750
  3. $700
  4. $200
 23) If the banking system gets $1000 in new reserves from the Fed and the required-reserve ratio is 0.25, then the maximum amount by which total deposits in the economy can increase is
  1. $6000
  2. $5000
  3. 2500
  4. 4000
 24) If the required reserve ratio is 0.1 and the reserve ratio that banks desire to maintain is 0.2, then the deposit multiplier is
  1. 3
  2. 10
  3. 10/3
  4. 5
 25) If inflation is strong, then the right Fed policy is to
  1. sell government bonds
  2. raise US interest rates
  3. both a and b
 26) A bank account that can be accessed by writing a check is called
  1. demand deposit
  2. cash deposit
  3. savings deposit
  4. automatic deposit
 27) An increase in market interest rates will
  1. reduce prices of all bonds
  2. reduce prices of government bonds
  3. reduce prices of municipal bonds
  4. increase prices of all bonds
 28) The central bank of the United States is the.
  1. FDIC
  2. Federal Reserve System
  3. c Bank of America .
  4. Bank of the United States
 29) suppose the balance budget multiplier is one, the it will be greater than one if
  1. saving are close to zero
  2. if prices are constant
  3. none of the above

Access options

Get online access or buy a physical book.

Option 1: Online access

Unlock the answers to 29 questions for just $9.99

You'll get immediate access after payment.

Step 1

Enter the email address where you want us to send your order to.



Step 2

Select one of the payment buttons below.