No explanation needed!

QUESTION 1

1. The Required Reserves amount =:
2. deposits*required reserve ratio
3. required reserves/deposits
4. deposits-loans
5. deposits-excess reserves
6. a&c

5 points

QUESTION 2

1. To increase lending capacity the Fed does all the following except:
2. reduces the required reserve ratio
3. increases the discount rate
4. buys bonds
5. all of the above

5 points

QUESTION 3

1. A Fractional Reserve Systems means banks:
2. allow borrowers to share loans
3. list interest as fractions
4. set aside a fraction of deposits
5. require only a portion of loans as collateral

5 points

QUESTION 4

1. Deposit to bank A = $600 and required reserves = .25 then cumulative change in transaction deposits = $:
2. 480
3. 600
4. 2400
5. 3000

5 points

QUESTION 5

1. Deposit to bank A = $100 and deposit to bank B = $80, then:
2. required reserves = .2
3. deposit to bank C = $60
4. cumulative change in transaction deposits = $320
5. all of these

5 points

QUESTION 6

1. Deposit to bank A = $600 and required reserves = .4 then cumulative change in transaction deposits = $:
2. 240
3. 360
4. 900
5. 1500

5 points

QUESTION 7

1. A bond is sold for $1000 and pays $100 each year for a yield of 10%. An event causes this class of bonds to double in value but the bond still pays $100 yearly. The yield now is
2. 1
3. 5
4. 10
5. 20

5 points

QUESTION 8

1. M1is _M2.
2. bigger than
3. smaller than
4. equal to
5. is sometimes bigger and sometimes smaller

5 points

QUESTION 9

1. Money is:
2. cash
3. coins
4. gold
5. anything representing value

5 points

QUESTION 10

1. Belowthe districts, the Federal Reserve has _ branches.
2. 4
3. 12
4. 25
5. 50

5 points

QUESTION 11

1. Deposit to bank A = $100 and deposit to bank B = $70, then
2. required reserves = .25
3. deposit to bank C = $50
4. cumulative change in transaction deposits = $333.33
5. all of these

5 points

QUESTION 12

1. The Federal Reserve's three monetary tools are all except:
2. reserve requirement
3. discount rate
4. open market operation
5. tax policy

5 points

QUESTION 13

1. Banks create money, but this ability is NOT determined by popularity of:
2. check writing
3. lending
4. borrowing
5. bank regulation
6. voting

5 points

QUESTION 14

1. M2 is composed of all the following except:
2. M1
3. savings accounts
4. money market mutual funds
5. bonds

5 points

QUESTION 15

1. Deposit to bank A = $600 and required reserves = .25 then deposit to bank B = $:
2. 150
3. 450
4. 1800
5. 2400

5 points

QUESTION 16

1. Deposit to bank A = $100 and deposit to bank B = $50, then:
2. required reserves = .2
3. deposit to bank C = $40
4. cumulative change in transaction deposits = $200
5. all of these

5 points

QUESTION 17

1. Deposit to bank A = $400 and required reserves = .2 then cumulative change in transaction deposits = $:
2. 320
3. 400
4. 1600
5. 2000

5 points

QUESTION 18

1. A bond is sold for $500 and pays $50 each year in interest without any maturity date in sight. The yield is _ %.
2. 1
3. 5
4. 10
5. 20

5 points

QUESTION 19

1. When money is deposited in a bank, most of this deposit is in turn:
2. held in a bank'svaults
3. held by the Federal Reserve
4. taxed by gov.
5. lent to a third party

5 points

QUESTION 20

1. To decrease lending capacity the Fed:
2. reduces required reserves ratio
3. reduces discount rate
4. buys bonds
5. sells bonds