The ability of a central bank to set monetary policy instruments is

The ability of a central bank to set monetary policy instruments is A) political independence. B) goal independence. C) policy independence. D) instrument...

Instrument independence is the ability of ________ to set monetary policy ________.

Instrument independence is the ability of ________ to set monetary policy ________. A) the central bank; goals B) Congress; goals C) Congress; instruments D)...

Subject to the approval of the Board of Governors, the decision of choosing the president of a district Federal Reserve Bank is made by

Subject to the approval of the Board of Governors, the decision of choosing the president of a district Federal Reserve Bank is made by A) all nine...

The Federal Open Market Committee's "balance of risks" is an assessment of whether, in the future, its primary concern will be

The Federal Open Market Committee's "balance of risks" is an assessment of whether, in the future, its primary concern will be A) higher exchange...

The Federal Open Market Committee's "balance of risks" is an assessment of whether, in the future, its primary concern will be

The Federal Open Market Committee's "balance of risks" is an assessment of whether, in the future, its primary concern will be A) higher exchange...

The teal book is the Fed research document containing

The teal book is the Fed research document containing A) the forecast of national economic variables for the next three years. B) forecasts of the...

The research document given to the Federal Open Market Committee that contains information on the state of the economy in each Federal Reserve district is called the

The research document given to the Federal Open Market Committee that contains information on the state of the economy in each Federal Reserve district...

Although neither ________ nor the ________ are officially set by the Federal Open Market Committee, decisions concerning these policy tools are effectively made by the committee.

Although neither ________ nor the ________ are officially set by the Federal Open Market Committee, decisions concerning these policy tools are effectively...

Each Fed bank president attends FOMC meetings; although only ________ Fed bank presidents vote on policy, all ________ provide input.

Each Fed bank president attends FOMC meetings; although only ________ Fed bank presidents vote on policy, all ________ provide input. A) three; ten B)...

The majority of members of the Federal Open Market Committee are

The majority of members of the Federal Open Market Committee are A) Federal Reserve Bank presidents. B) members of the Federal Advisory Council. C)...

The Federal Open Market Committee consists of the

The Federal Open Market Committee consists of the A) five senior members of the seven-member Board of Governors. B) seven members of the Board of...

The Federal Reserve entity that makes decisions regarding the conduct of open market operations is the

The Federal Reserve entity that makes decisions regarding the conduct of open market operations is the A) Board of Governors. B) chairman of the...

The Federal Open Market Committee usually meets ________ times a year.

The Federal Open Market Committee usually meets ________ times a year. A) four B) six C) eight D) twelve Answer:...

Which of the followings is not a current duty of the Board of Governors of the Federal Reserve System?

Which of the followings is not a current duty of the Board of Governors of the Federal Reserve System? A) Setting margin requirements, the fraction...

Which of the followings is a duty of the Board of Governors of the Federal Reserve System?

Which of the followings is a duty of the Board of Governors of the Federal Reserve System? A) Setting margin requirements, the fraction of the purchase...

Which of the followings is a duty of the Board of Governors of the Federal Reserve System?

Which of the followings is a duty of the Board of Governors of the Federal Reserve System? A) Setting margin requirements, the fraction of the purchase...

While the discount rate is "established" by the regional Federal Reserve Banks, in truth, the rate is determined by

While the discount rate is "established" by the regional Federal Reserve Banks, in truth, the rate is determined by A) Congress. B) the president...

Each governor on the Board of Governors can serve

Each governor on the Board of Governors can serve A) only one nonrenewable fourteen-year term. B) one full nonrenewable fourteen-year term plus part...

The Chairman of the Board of Governors is chosen from among the seven governors and serves a ________ term.

The Chairman of the Board of Governors is chosen from among the seven governors and serves a ________ term. A) one-year B) two-year C) four-year D)...

Members of the Board of Governors are

Members of the Board of Governors are A) chosen by the Federal Reserve Bank presidents. B) appointed by the newly elected president of the United...

There are ________ members of the Board of Governors of the Federal Reserve System.

There are ________ members of the Board of Governors of the Federal Reserve System. A) 5 B) 7 C) 12 D) 19 Answer:...

The Depository Institutions Deregulation and Monetary Control Act of 1980

The Depository Institutions Deregulation and Monetary Control Act of 1980 A) established higher reserve requirements for nonmember than for member...

Banks subject to reserve requirements set by the Federal Reserve System include

Banks subject to reserve requirements set by the Federal Reserve System include A) only nationally chartered banks. B) only banks with assets less...

The Fed's support of the Depository Institutions Deregulation and Monetary Control Act of 1980 stemmed in part from its

The Fed's support of the Depository Institutions Deregulation and Monetary Control Act of 1980 stemmed in part from its A) concern over declining...

Prior to 1980, member banks left the Federal Reserve System due to

Prior to 1980, member banks left the Federal Reserve System due to A) the high cost of discount loans. B) the high cost of required reserves. C)...

Of all commercial banks, about ________ percent belong to the Federal Reserve System.

Of all commercial banks, about ________ percent belong to the Federal Reserve System. A) 17 B) 22 C) 38 D) 52 Answer:...

All ________ are required to be members of the Fed.

All ________ are required to be members of the Fed. A) state chartered banks B) nationally chartered banks C) banks with assets less than $100 million D)...

Which of the following functions is not performed by any of the twelve regional Federal Reserve Banks?

Which of the following functions is not performed by any of the twelve regional Federal Reserve Banks? A) Check clearing B) Conducting economic research C)...

An important function of the regional Federal Reserve Banks is

An important function of the regional Federal Reserve Banks is A) setting reserve requirements. B) clearing checks. C) determining monetary policy. D)...

The president from which Federal Reserve Bank always has a vote in the Federal Open Market Committee?

The president from which Federal Reserve Bank always has a vote in the Federal Open Market Committee? A) Philadelphia B) Boston C) San Francisco D)...

The Federal Reserve Bank of ________ plays a special role in the Federal Reserve System because it houses the open market desk.

The Federal Reserve Bank of ________ plays a special role in the Federal Reserve System because it houses the open market desk. A) Boston B) New...

Member commercial banks have purchased stock in their district Fed banks; the dividend paid by that stock is limited by law to ________ percent annually.

Member commercial banks have purchased stock in their district Fed banks; the dividend paid by that stock is limited by law to ________ percent annually. A)...

The nine directors of the Federal Reserve Banks are split into three categories: ________ are professional bankers, ________ are leaders from industry, and ________ are to represent the public interest and are not allowed to be officers, employees, or stockholders of banks.

The nine directors of the Federal Reserve Banks are split into three categories: ________ are professional bankers, ________ are leaders from industry,...

Each Federal Reserve bank has nine directors. Of these ________ are appointed by the member banks and ________ are appointed by the Board of Governors.

Each Federal Reserve bank has nine directors. Of these ________ are appointed by the member banks and ________ are appointed by the Board of Governors. A)...

The Federal Reserve Banks are ________ institutions since they are owned by the ________.

The Federal Reserve Banks are ________ institutions since they are owned by the ________. A) quasi-public; private commercial banks in the district...

The three largest Federal Reserve banks (New York, Chicago, and San Francisco) combined hold more than ________ percent of the assets of the Federal Reserve System.

The three largest Federal Reserve banks (New York, Chicago, and San Francisco) combined hold more than ________ percent of the assets of the Federal...

Which of the following is an entity of the Federal Reserve System?

Which of the following is an entity of the Federal Reserve System? A) The U.S. Treasury Secretary B) The FOMC C) The Comptroller of the Currency D)...

Which of the following is NOT an entity of the Federal Reserve System?

Which of the following is NOT an entity of the Federal Reserve System? A) Federal Reserve Banks B) The Comptroller of the Currency C) The Board of...

What makes the Federal Reserve so unique compared to other central banks around the world is its

What makes the Federal Reserve so unique compared to other central banks around the world is its A) centralized structure. B) decentralized structure. C)...

The financial panic of 1907 resulted in such widespread bank failures and substantial losses to depositors that the American public finally became convinced that

The financial panic of 1907 resulted in such widespread bank failures and substantial losses to depositors that the American public finally became convinced...

The public's fear of centralized power and distrust of moneyed interests led to the demise of the first two experiments in central banking, otherwise known as

The public's fear of centralized power and distrust of moneyed interests led to the demise of the first two experiments in central banking, otherwise...

The Second Bank of the United States

The Second Bank of the United States A) was disbanded in 1811 when its charter was not renewed. B) had its charter renewal vetoed in 1832. C) is...

The First Bank of the United States

The First Bank of the United States A) was disbanded in 1811 when its charter was not renewed. B) had its charter renewal vetoed in 1832. C) was fundamental...

The M2 money supply is represented by

The M2 money supply is represented by A) M2 = (1+c+t+mm)/(rr+e+c) × MB. B) M2 = (1+c+t+mm)/(rr+e+c) × 1/MB C) MB = (1+c+t+mm)/(rr+e+c) × M2. D) MB...

In the model of the money supply process for M2, the relationship between checkable deposits and the M2 money supply is represented by

In the model of the money supply process for M2, the relationship between checkable deposits and the M2 money supply is represented by A) D = 1/(1+c+t+mm)...

The increase in the currency ratio during World War II was due to

The increase in the currency ratio during World War II was due to A) bank panics. B) a drop in the rate of interest paid on checking deposits. C)...

The factor accounting for the steepest rise in the currency ratio since 1892 is

The factor accounting for the steepest rise in the currency ratio since 1892 is A) taxes. B) bank panics. C) illegal activity. D) an increase in...

The steepest increase in the currency ratio since 1892 occurred during

The steepest increase in the currency ratio since 1892 occurred during A) World War II. B) the Great Depression. C) the interwar years. D) the past...

The increase in the availability of ATM's has caused the cost of acquiring currency to ________ which will cause the currency ratio to ________, everything else held constant.

The increase in the availability of ATM's has caused the cost of acquiring currency to ________ which will cause the currency ratio to ________, everything...

Everything else held constant, an increase in the interest rate paid on checkable deposits will cause ________ in the amount of checkable deposits held relative to currency holdings and ________ in the currency ratio.

Everything else held constant, an increase in the interest rate paid on checkable deposits will cause ________ in the amount of checkable deposits held...

Everything else held constant, an increase in wealth will cause the holdings of checkable deposits to the holdings of currency to ________ and the currency ratio will ________.

Everything else held constant, an increase in wealth will cause the holdings of checkable deposits to the holdings of currency to ________ and the currency...

Part of the increase in currency holdings in the 1960s and 1970s can be attributed to

Part of the increase in currency holdings in the 1960s and 1970s can be attributed to A) increases in income tax rates. B) the switch from progressive...

Factors causing an increase in currency holdings include

Factors causing an increase in currency holdings include A) an increase in the interest rates paid on checkable deposits. B) an increase in the cost...

Everything else held constant, an increase in the excess reserve ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier.

Everything else held constant, an increase in the excess reserve ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier. A)...

Everything else held constant, an increase in the excess reserve ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply.

Everything else held constant, an increase in the excess reserve ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply. A)...

Everything else held constant, an increase in the money market fund ratio will result in ________ in the M1 money multiplier and ________ in the M2 money multiplier.

Everything else held constant, an increase in the money market fund ratio will result in ________ in the M1 money multiplier and ________ in the M2...

Everything else held constant, an increase in the money market fund ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply.

Everything else held constant, an increase in the money market fund ratio will mean ________ in the M2 money multiplier and ________ in the M2 money...

Everything else held constant, an increase in the time deposit ratio will result in ________ in the M1 money multiplier and ________ in the M2 money multiplier.

Everything else held constant, an increase in the time deposit ratio will result in ________ in the M1 money multiplier and ________ in the M2 money...

Everything else held constant, an increase in the time deposit ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply.

Everything else held constant, an increase in the time deposit ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply. A)...

Everything else held constant, an increase in the required reserve ratio will result in ________ in M1 and ________ in M2.

Everything else held constant, an increase in the required reserve ratio will result in ________ in M1 and ________ in M2. A) an increase; an increase B)...

Everything else held constant, an increase in the required reserve ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply.

Everything else held constant, an increase in the required reserve ratio will mean ________ in the M2 money multiplier and ________ in the M2 money...

Everything else held constant, a decrease in the currency ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier.

Everything else held constant, a decrease in the currency ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier. A)...

Everything else held constant, an increase in the currency ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply.

Everything else held constant, an increase in the currency ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply. A)...

The M2 money multiplier is

The M2 money multiplier is A) negatively related to high-powered money. B) positively related to the time deposit ratio. C) positively related to...

The equation that represents M2 in the model of the money supply process is

The equation that represents M2 in the model of the money supply process is A) M2 = C + D. B) M2 = C + D + T - MMF. C) M2 = C + D - T + MMF. D) M2...

Suppose the Bank of China permanently decreases its purchases of U.S. government bonds and, instead, holds more dollars on deposit at the Federal Reserve. Everything else held constant, a open market ________ would be the appropriate monetary policy action for the Fed to take to offset the expected ________ in the monetary base in the United States.

Suppose the Bank of China permanently decreases its purchases of U.S. government bonds and, instead, holds more dollars on deposit at the Federal Reserve....

Suppose, while cleaning out its closets, a worker at the Federal Reserve bank branch in Memphis discovers a painting of Elvis (medium: acrylic on velvet) that used to grace the walls of the conference room. Suppose further that, at a public auction, the bank sells the painting for $19.95. This sale will cause ________ in the monetary base, everything else held constant.

Suppose, while cleaning out its closets, a worker at the Federal Reserve bank branch in Memphis discovers a painting of Elvis (medium: acrylic on velvet)...

An increase in which of the following leads to a decline in the monetary base?

An increase in which of the following leads to a decline in the monetary base? A) Float B) Discount loans C) Foreign deposits at the Fed D) SDRs Answer:...

U.S. Treasury deposits at the Fed are ________ for the Fed but ________ for the Treasury. Thus an increase in U.S. Treasury deposits ________ the monetary base.

U.S. Treasury deposits at the Fed are ________ for the Fed but ________ for the Treasury. Thus an increase in U.S. Treasury deposits ________ the monetary...

An increase in U.S. Treasury deposits at the Fed reduces both ________ and the ________.

An increase in U.S. Treasury deposits at the Fed reduces both ________ and the ________. A) reserves; monetary base B) Fed liabilities; money multiplier C)...

An increase in Treasury deposits at the Fed causes

An increase in Treasury deposits at the Fed causes A) the monetary base to increase. B) the monetary base to decrease. C) Fed assets to increase...

A Fed purchase of gold, SDRs, a deposit denominated in a foreign currency or any other asset is just an open market ________ of these assets, ________ the monetary base.

A Fed purchase of gold, SDRs, a deposit denominated in a foreign currency or any other asset is just an open market ________ of these assets, ________...

When the Fed purchases artwork to decorate the conference room at the Federal Reserve Bank of Kansas City,

When the Fed purchases artwork to decorate the conference room at the Federal Reserve Bank of Kansas City, A) reserves rise, but the monetary base...

Which of the following are not liabilities on the Fed's balance sheet?

Which of the following are not liabilities on the Fed's balance sheet? A) Discount loans B) Bank deposits C) Deferred availability cash items D)...

Which of the following are not assets on the Fed's balance sheet?

Which of the following are not assets on the Fed's balance sheet? A) Securities B) Discount loans C) Cash items in the process of collection D) Deferred...

When the Treasury acquires gold or SDRs, it issues certificates to the ________, which are a claim on the gold or SDRs, and in turn is credited with deposit balances at the ________.

When the Treasury acquires gold or SDRs, it issues certificates to the ________, which are a claim on the gold or SDRs, and in turn is credited with...

Special Drawing Rights (SDRs) are issued to governments by the ________ to settle international debts and have replaced ________ in international transactions.

Special Drawing Rights (SDRs) are issued to governments by the ________ to settle international debts and have replaced ________ in international transactions. A)...

The volume of loans that the Fed makes to banks is affected by the Fed's setting of the interest rate on these loans, called the

The volume of loans that the Fed makes to banks is affected by the Fed's setting of the interest rate on these loans, called the A) federal funds...

Fed's holdings of securities consist primarily of ________, but also in the past have included ________.

Fed's holdings of securities consist primarily of ________, but also in the past have included ________. A) Treasury securities; bankers' acceptances B)...

The two most important categories of assets on the Fed's balance sheet are ________ and ________ because they earn interest.

The two most important categories of assets on the Fed's balance sheet are ________ and ________ because they earn interest. A) discount loans; coins B)...

Which is the most important category of Fed assets?

Which is the most important category of Fed assets? A) Securities B) Discount loans C) Gold and SDR certificates D) Cash items in the process of...

During the 2007-2009 financial crisis the excess reserve ratio

During the 2007-2009 financial crisis the excess reserve ratio A) increased sharply. B) decreased sharply. C) increased slightly. D) decreased slightly. Answer:...

During the 2007-2009 financial crisis the currency ratio

During the 2007-2009 financial crisis the currency ratio A) increased sharply. B) decreased sharply. C) increased slightly. D) decreased slightly Answer:...

In the early 1930s, the currency ratio rose, as did the level of excess reserves. Money supply analysis predicts that, everything else held constant, the money supply should have

In the early 1930s, the currency ratio rose, as did the level of excess reserves. Money supply analysis predicts that, everything else held constant,...

During the bank panics of the Great Depression the excess reserve ratio

During the bank panics of the Great Depression the excess reserve ratio A) increased sharply. B) decreased sharply. C) increased slightly. D) decreased...

During the bank panics of the Great Depression the currency ratio

During the bank panics of the Great Depression the currency ratio A) increased sharply. B) decreased sharply. C) increased slightly. D) decreased...

Recognizing the distinction between borrowed reserves and the nonborrowed monetary base, the money supply model is specified as

Recognizing the distinction between borrowed reserves and the nonborrowed monetary base, the money supply model is specified as A) M = m × (MBn -...

The money multiplier is

The money multiplier is A) negatively related to high-powered money. B) positively related to the excess reserves ratio. C) negatively related to...

The money supply is ________ related to expected deposit outflows, and is ________ related to the market interest rate.

The money supply is ________ related to expected deposit outflows, and is ________ related to the market interest rate. A) negatively; negatively B)...

The excess reserves ratio is ________ related to expected deposit outflows, and is ________ related to the market interest rate.

The excess reserves ratio is ________ related to expected deposit outflows, and is ________ related to the market interest rate. A) negatively; negatively B)...

Everything else held constant, an increase in the excess reserves ratio causes the M1 money multiplier to ________ and the money supply to ________.

Everything else held constant, an increase in the excess reserves ratio causes the M1 money multiplier to ________ and the money supply to ________. A)...

Everything else held constant, a decrease in the excess reserves ratio causes the M1 money multiplier to ________ and the money supply to ________.

Everything else held constant, a decrease in the excess reserves ratio causes the M1 money multiplier to ________ and the money supply to ________. A)...

Everything else held constant, a decrease in the currency ratio causes the M1 money multiplier to ________ and the money supply to ________.

Everything else held constant, a decrease in the currency ratio causes the M1 money multiplier to ________ and the money supply to ________. A) decrease;...

Everything else held constant, an increase in the currency ratio causes the M1 money multiplier to ________ and the money supply to ________.

Everything else held constant, an increase in the currency ratio causes the M1 money multiplier to ________ and the money supply to ________. A)...

Everything else held constant, a decrease in the currency-checkable deposit ratio will mean

Everything else held constant, a decrease in the currency-checkable deposit ratio will mean A) an increase in currency in circulation and an increase...

Everything else held constant, an increase in the currency-checkable deposit ratio will mean

Everything else held constant, an increase in the currency-checkable deposit ratio will mean A) an increase in currency in circulation and an increase...

Everything else held constant, a decrease in the required reserve ratio on checkable deposits causes the M1 money multiplier to ________ and the money supply to ________.

Everything else held constant, a decrease in the required reserve ratio on checkable deposits causes the M1 money multiplier to ________ and the money...

Everything else held constant, an increase in the required reserve ratio on checkable deposits causes the M1 money multiplier to ________ and the money supply to ________.

Everything else held constant, an increase in the required reserve ratio on checkable deposits causes the M1 money multiplier to ________ and the money...

Everything else held constant, a decrease in the required reserve ratio on checkable deposits will mean

Everything else held constant, a decrease in the required reserve ratio on checkable deposits will mean A) a decrease in the money supply. B) an...

The formula for the M1 money multiplier is

The formula for the M1 money multiplier is A) m = (1 + c)/(rr + e + c). B) M = 1/(rr + e + c). C) M = (1 + c)/(rr + e + c). D) m = [1/(rr + e +...

The formula that links checkable deposits to the money supply is

The formula that links checkable deposits to the money supply is A) M = (1+c)/D B) M = 1/(1+c) × D. C) D = 1/(1+c) × M. D) D = (1 + c) × M. Answer:...

The formula that links checkable deposits to the monetary base is

The formula that links checkable deposits to the monetary base is A) m = 1/(rr+e+c) B) M = 1/(rr+e+c) C) M = 1+c/(rr+e+c) D) D = 1/(rr+e+c) E) D...

If the Fed injects reserves into the banking system and they are held as excess reserves, then the monetary base ________ and the money supply ________.

If the Fed injects reserves into the banking system and they are held as excess reserves, then the monetary base ________ and the money supply ________. A)...

If the Fed injects reserves into the banking system and they are held as excess reserves, then the money supply

If the Fed injects reserves into the banking system and they are held as excess reserves, then the money supply A) increases by only the initial...

An increase in the monetary base that goes into currency is ________, while an increase that goes into deposits is ________.

An increase in the monetary base that goes into currency is ________, while an increase that goes into deposits is ________. A) multiplied; multiplied B)...

An increase in the monetary base that goes into ________ is not multiplied, while an increase that goes into ________ is multiplied.

An increase in the monetary base that goes into ________ is not multiplied, while an increase that goes into ________ is multiplied. A) deposits;...

The equation that shows the amount of the monetary base needed to support existing levels of checkable deposits, excess reserves, and currency is

The equation that shows the amount of the monetary base needed to support existing levels of checkable deposits, excess reserves, and currency is A)...

Since the Federal Reserve sets the required reserve ratio to less than one, one dollar of reserves can support ________ of checkable deposits.

Since the Federal Reserve sets the required reserve ratio to less than one, one dollar of reserves can support ________ of checkable deposits. A)...

The total amount of required reserves in the banking system is equal to the ________ the required reserve ratio and checkable deposits.

The total amount of required reserves in the banking system is equal to the ________ the required reserve ratio and checkable deposits. A) sum of B)...

The total amount of reserves in the banking system is equal to the ________ required reserves and excess reserves.

The total amount of reserves in the banking system is equal to the ________ required reserves and excess reserves. A) sum of B) difference between C)...

An assumption in the model of the money supply process is that the desired levels of currency and excess reserves

An assumption in the model of the money supply process is that the desired levels of currency and excess reserves A) are given as constants. B) grow...

The formula linking the money supply to the monetary base is

The formula linking the money supply to the monetary base is A) M = m/MB. B) M = m × MB. C) m = M × MB. D) MB = M × m. E) M = m + MB. Answer:...

The ratio that relates the change in the money supply to a given change in the monetary base is called the

The ratio that relates the change in the money supply to a given change in the monetary base is called the A) money multiplier. B) required reserve...

The Fed can exert more precise control over ________ than it can over ________.

The Fed can exert more precise control over ________ than it can over ________. A) high-powered money; reserves B) high-powered money; the monetary...

Models describing the determination of the money supply and the Fed's role in this process normally focus on ________ rather than ________, since Fed actions have a more predictable effect on the former.

Models describing the determination of the money supply and the Fed's role in this process normally focus on ________ rather than ________, since Fed...

In the model of the money supply process, the bank's role in influencing the money supply process is represented by

In the model of the money supply process, the bank's role in influencing the money supply process is represented by A) the excess reserve. B) both...

In the model of the money supply process, the depositor's role in influencing the money supply is represented by

In the model of the money supply process, the depositor's role in influencing the money supply is represented by A) the currency holdings. B) the...

In the model of the money supply process, the Federal Reserve's role in influencing the money supply is represented by

In the model of the money supply process, the Federal Reserve's role in influencing the money supply is represented by A) both the required reserve...

Everything else held constant, a decrease in holdings of excess reserves will mean

Everything else held constant, a decrease in holdings of excess reserves will mean A) a decrease in the money supply. B) an increase in the money...

Everything else held constant, an increase in currency holdings will cause

Everything else held constant, an increase in currency holdings will cause A) the money supply to rise. B) the money supply to remain constant. C)...

A ________ in market interest rates relative to the discount rate will cause discount borrowing to ________.

A ________ in market interest rates relative to the discount rate will cause discount borrowing to ________. A) fall; increase B) rise; decrease C)...

The amount of borrowed reserves is ________ related to the discount rate, and is ________ related to the market interest rate.

The amount of borrowed reserves is ________ related to the discount rate, and is ________ related to the market interest rate. A) negatively; negatively B)...

The money supply is ________ related to the nonborrowed monetary base, and ________ related to the level of borrowed reserves.

The money supply is ________ related to the nonborrowed monetary base, and ________ related to the level of borrowed reserves. A) positively; negatively B)...

An increase in the nonborrowed monetary base, everything else held constant, will cause

An increase in the nonborrowed monetary base, everything else held constant, will cause A) the money supply to fall. B) the money supply to rise. C)...

Decisions by ________ about their holdings of currency and by ________ about their holdings of excess reserves affect the money supply.

Decisions by ________ about their holdings of currency and by ________ about their holdings of excess reserves affect the money supply. A) borrowers;...

Decisions by depositors to increase their holdings of ________, or of banks to hold excess reserves will result in a ________ expansion of deposits than the simple model predicts.

Decisions by depositors to increase their holdings of ________, or of banks to hold excess reserves will result in a ________ expansion of deposits...

Decisions by depositors to increase their holdings of ________, or of banks to hold ________ will result in a smaller expansion of deposits than the simple model predicts.

Decisions by depositors to increase their holdings of ________, or of banks to hold ________ will result in a smaller expansion of deposits than the...

The simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the Fed

The simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that...

In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed

In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that...

If the required reserve ratio is 10 percent, the simple deposit multiplier is

If the required reserve ratio is 10 percent, the simple deposit multiplier is A) 5.0. B) 2.5. C) 100.0. D) 10.0 Answer:...

If reserves in the banking system increase by $100, then checkable deposits will increase by $500 in the simple model of deposit creation when the required reserve ratio is

If reserves in the banking system increase by $100, then checkable deposits will increase by $500 in the simple model of deposit creation when the required...

If reserves in the banking system increase by $100, then checkable deposits will increase by $1000 in the simple model of deposit creation when the required reserve ratio is

If reserves in the banking system increase by $100, then checkable deposits will increase by $1000 in the simple model of deposit creation when the...

The simple deposit multiplier can be expressed as the ratio of the

The simple deposit multiplier can be expressed as the ratio of the A) change in reserves in the banking system divided by the change in deposits. B)...

The simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in checkable deposits equals the product of the change in reserves and the

The simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in checkable deposits equals the product of the...

The formula for the simple deposit multiplier can be expressed as

The formula for the simple deposit multiplier can be expressed as A) ?R = × ?T B) ?D = × ?R C) ?rr = × ?T D) ?R = × ?D Answer:...

In the simple deposit expansion model, if the Fed extends a $100 discount loan to a bank that previously had no excess reserves, deposits in the banking system can potentially increase by

In the simple deposit expansion model, if the Fed extends a $100 discount loan to a bank that previously had no excess reserves, deposits in the banking...

In the simple deposit expansion model, if the Fed extends a $100 discount loan to a bank that previously had no excess reserves, the bank can now increase its loans by

In the simple deposit expansion model, if the Fed extends a $100 discount loan to a bank that previously had no excess reserves, the bank can now increase...

In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase by

In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, deposits in the...

In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, the bank can now increase its loans by

In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, the bank can now...

If the required reserve ratio is equal to 10 percent, a single bank can increase its loans up to a maximum amount equal to

If the required reserve ratio is equal to 10 percent, a single bank can increase its loans up to a maximum amount equal to A) its excess reserves. B)...

When the Fed supplies the banking system with an extra dollar of reserves, deposits ________ by ________ than one dollar—a process called multiple deposit creation.

When the Fed supplies the banking system with an extra dollar of reserves, deposits ________ by ________ than one dollar—a process called multiple deposit...

When the Fed supplies the banking system with an extra dollar of reserves, deposits increase by more than one dollar—a process called

When the Fed supplies the banking system with an extra dollar of reserves, deposits increase by more than one dollar—a process called A) extra deposit...

The relationship between borrowed reserves, the nonborrowed monetary base, and the monetary base is

The relationship between borrowed reserves, the nonborrowed monetary base, and the monetary base is A) MB = MBn - BR. B) BR = MBn - MB. C) BR = MB...

Subtracting borrowed reserves from the monetary base obtains

Subtracting borrowed reserves from the monetary base obtains A) reserves. B) high-powered money. C) the nonborrowed monetary base. D) the borrowed...

The Fed does not tightly control the monetary base because it does not completely control

The Fed does not tightly control the monetary base because it does not completely control A) open market purchases. B) open market sales. C) borrowed...

Suppose your payroll check is directly deposited to your checking account. Everything else held constant, total reserves in the banking system ________ and the monetary base ________.

Suppose your payroll check is directly deposited to your checking account. Everything else held constant, total reserves in the banking system ________...

Suppose a person cashes his payroll check and holds all the funds in the form of currency. Everything else held constant, total reserves in the banking system ________ and the monetary base ________.

Suppose a person cashes his payroll check and holds all the funds in the form of currency. Everything else held constant, total reserves in the banking...

An increase in ________ leads to an equal ________ in the monetary base in the short run.

An increase in ________ leads to an equal ________ in the monetary base in the short run. A) float; decrease B) float; increase C) discount loans;...

The monetary base declines when

The monetary base declines when A) the Fed extends discount loans. B) Treasury deposits at the Fed decrease. C) float increases. D) the Fed sells...

A decrease in ________ leads to an equal ________ in the monetary base in the short run.

A decrease in ________ leads to an equal ________ in the monetary base in the short run. A) float; increase B) float; decrease C) Treasury deposits...

There are two ways in which the Fed can provide additional reserves to the banking system: it can ________ government bonds or it can ________ discount loans to commercial banks.

There are two ways in which the Fed can provide additional reserves to the banking system: it can ________ government bonds or it can ________ discount...

If the Fed decides to reduce bank reserves, it can

If the Fed decides to reduce bank reserves, it can A) purchase government bonds. B) extend discount loans to banks. C) sell government bonds. D)...

When the Federal Reserve calls in a discount loan from a bank, the monetary base ________ and reserves ________.

When the Federal Reserve calls in a discount loan from a bank, the monetary base ________ and reserves ________. A) remains unchanged; decrease B)...