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Bottles of very fine wine are less liquid than demand deposits.

A) True
B) False

Correct Answer

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Currently,bank runs are a major problem for the U.S.banking system and the Fed.

A) True
B) False

Correct Answer

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When you purchase school supplies at the book store using cash,you are using money as a medium of exchange.

A) True
B) False

Correct Answer

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When the Soviet Union began breaking up in the late 1980s,cigarettes began replacing the ruble as the medium of exchange even though the ruble was legal tender.The cigarettes provide an example of commodity money.

A) True
B) False

Correct Answer

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Bank runs and the accompanying increase in the money multiplier caused the U.S.money supply to rise by 28 percent from 1929 to 1933.

A) True
B) False

Correct Answer

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U.S.dollars are an example of commodity money and hides used to make trades are an example of fiat money.

A) True
B) False

Correct Answer

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The federal funds rate is a long-term interest rate banks charge one another for loans.

A) True
B) False

Correct Answer

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An increase in the reserve requirement increases reserves and decreases the money supply.

A) True
B) False

Correct Answer

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The discount rate is the rate the Federal Reserve charges banks for loans.By lowering this rate,the Fed provides banks with a greater incentive to borrow from it.

A) True
B) False

Correct Answer

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In order for currency to be widely used as a medium of exchange,it is sufficient for the government to designate it as legal tender.

A) True
B) False

Correct Answer

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The money multiplier is higher when bankers are more cautious and hold excess reserves.

A) True
B) False

Correct Answer

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One plausible explanation for the large amount of U.S.currency outstanding is that many dollars are held abroad.

A) True
B) False

Correct Answer

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Demand deposits are balances in bank accounts that depositors can access by writing a check or using a debit card.

A) True
B) False

Correct Answer

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The Federal Reserve can alter the size of the money supply by changing reserves or changing reserve requirements.

A) True
B) False

Correct Answer

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The money supply of Granov is $10,000 in a 100-percent-reserve banking system.If the Central Bank of Granov decreases the reserve requirement ratio to 10 percent,the money supply could increase by no more than $9,000.

A) True
B) False

Correct Answer

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Members of the Board of Governors are appointed by the president of the U.S.and confirmed by the U.S.Senate.

A) True
B) False

Correct Answer

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Because of the multiple tools at its disposal,the Fed can control the money supply very precisely.

A) True
B) False

Correct Answer

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If the Fed decreases reserve requirements,the money supply will increase.

A) True
B) False

Correct Answer

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Commodity money cannot be used as a unit of account.

A) True
B) False

Correct Answer

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M1 includes savings deposits.

A) True
B) False

Correct Answer

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Showing 21 - 40 of 57

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