Only one the answer is correct What happens to the money supply if the deficit is financed by selling bonds to the general public? ( ) the money supply increases ( ) the money supply decreases ( ) the money supply is unaffected ( ) we cannot tell what will happen to the money supply "Transactions" money is money used as a ( ) store of value ( ) unit of account ( ) medium of exchange ( ) standard of deferred payment Which of the following was not an obstacle to the creation of the Federal Reserve System? ( ) Fear of too much government intervention in the economy. ( ) Disagreement over whether the central bank should be a private bank or a government institution. ( ) The successes of contemporary banking arrangements in avoiding bank panics. ( ) Distrust of moneyed interests as represented by Wall Street, banks, and corporations. How do the banks gain from this corporate behavior? "In the process, the money multiplies, since the banks are allowed to lend more money than they actually have, within limits set by the Federal Reserve Board. The board tries to anticipate how much the money will multiply as this process unfolds. If its calculations are right, just enough money will be created to accommodate the growth it desires for the economy. If the calculations are wrong, it would make them right by pumping some money into the economy or pumping some out." ( ) more loans can be made ( ) tax-free profits can be made ( ) interest rates can be increased ( ) by circumventing banking regulations Member banks of the Federal Reserve System include: ( ) Only banks who choose to participate ( ) All commercial banks ( ) All nationally chartered banks ( ) All depository institutions A sale of government bonds by the central bank should cause ( ) bond prices to rise ( ) an increase in the supply of money ( ) an increase in chartered banks loans ( ) a decrease in reserves of the banking system