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Exam 29: The Monetary System

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Question 61

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Suppose the banking system currently has $400 billion in reserves, the reserve requirement is 8 percent, and excess reserves amount to $5 billion. What is the level of deposits?

A) $5,000 billion
B) $4,937.5 billion
C) $5,062.5 billion
D) $4,995 billion

E) B) and D)
F) All of the above

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Question 62

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What is the Term Auction Facility?

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The Term Auction Facility is the market ...

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Question 63

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A bank has $8,000 in deposits and $6,000 in loans. It has loaned out all it can, given the reserve requirement. It follows that the reserve requirement is

Which of the three functions of money are commonly met by each of the following assets in the U.S. economy? a.paper dollar b.precious metals c.collectibles such as baseball cards, stamps, and antiques

What is the change in the money supply when the Fed purchases $100 worth of bonds in a 100-percent-reserve banking system?

What is the difference between money and wealth?

If an economy uses diamonds as money, then that economy's money

Table 29-4 ​ -Refer to Table 29-4. If the Fed's reserve requirement is 6 percent, then what quantity of excess reserves does the Bank of Cheerton now hold?

The primary tool used by the Federal Reserve to change the money supply is _____.

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 $800 million in deposits and $738 million in loans. Given this information you find that the reserve requirement must be

When the Fed purchases government bonds the money supply _____ and the federal funds rate _____.

If the reserve requirement is 7 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $300, it

In the nation of Wiknam, the money supply is $80,000 and reserves are $19,000. Assuming that people hold only deposits and no currency, and that banks hold no excess reserves, then the reserve requirement is

Table 29-1 The following table describes what traders in a small economy want versus what they have. ​ ​ $\begin{array} { | c | c | c | } \hline \text { Trader } & \text { Has } & \text { Wants } \\\hline \text { Alexis } & \text { an apple } & \text { a grapefruit } \\\hline \text { Jelani } & \text { a carrot } & \text { a banana } \\\hline \text { Kacey } & \text { a grapefruit } & \text { an apple } \\\hline \text { Malika } & \text { a zucchini } & \text { a carrot } \\\hline\end{array}$ ​ -Refer to Table 29-1. Which, if any, pairs of traders has a double coincidence of wants?

When the Fed makes open-market purchases bank

If the public decides to hold more currency and fewer deposits in banks, bank reserves

A bank has $1000 in deposits and maintains a 12 percent reserve ratio. Its reserves are $_____.

Money is

The manager of the bank where you work tells you that the bank has $200 million in deposits and $24.5 million dollars in loans. If the reserve requirement is 6 percent, how much is the bank holding in excess reserves?

The Fed ____ bonds when it conducts an open-market purchase. This action _____ the money supply.