Question 1

When the Fed conducts open-market purchases

Question 1 options:

a)	it buys Treasury securities, which increases the money supply.

b)	it buys Treasury securities, which decreases the money supply.

c)	it borrows money from member banks, which increases the money supply.

d)	it lends money to member banks, which decreases the money supply.

Question 2

The amount of currency per person in the United States is about

Question 2 options:

a)

$125.

b)

$300.

c)

$2,500.

d)

$3,700.

Question 3

Money market mutual funds are included in

Question 3 options:

a)	M1 but not M2.

b)	M1 and M2.

c)	M2 but not M1.

d)	neither M1 nor M2.

Question 4

The New York Federal Reserve Bank

Question 4 options:

a)	president always gets to vote at the FOMC meetings.

b)	conducts open market transactions.

c)	is one of 12 regional Federal Reserve Banks.

d)	All of the above are correct.

Question 5

Bank of Springfield

Assets	Liabilities
Reserves	$19,200	Deposits	$240,000
Loans	228,000

Refer to Table 16-6. If the Bank of Springfield has lent out all the money it can given its level of deposits, then what is the reserve requirement?

Question 5 options:

a)	5.00 percent

b)	8.00 percent

c)	8.42 percent

d)	95.00 percent

Question 6

Commodity money is

Question 6 options:

a)	backed by gold.

b)	the principal type of money in use today.

c)	money with intrinsic value.

d)	receipts created in international trade that are used as a medium of exchange.