TRUE or FALSE?

1. Rather than continue to bailout one firm at a time, the Bush Administration pushed for TARP, a sweeping program to allow the Treasury Department to take over firms.
2. The Federal Reserve essentially bailed out Bear Stearns by lending money to J.P. Morgan to support Morgan's buyout of Stearns.
3. Unlike in the case of counterfeiting, the injection of new money by the banking system will benefit the early receivers at the expense of the late receivers.
4. The "multiple deposit creation" process shows that at each succeeding stage the increase in loans falls.

5.If banks are required to hold 10% of deposits in reserves, the simple deposit multiplier (or, "maximum money multiplier") is 100.

6.The currency ratio is currency held by the public divided by demand deposits.

7.If the currency ratio is 20%, the required reserve ratio is 15% and the excess reserve ratio is 5%, the value of the M1 money multiplier is 3.0.

8.In Murphy's example, when Bill deposited $1000 in his bank nothing happened to the money supply, but when Sally borrowed it from the bank, the money supply grew.

9.A key argument against fractional-reserve banking, as Polleit explains, is that two people can't simultaneously have ownership of the same item (i.e., money).

10.Polleit claims that as long as a fractional reserve banking system was voluntarily agreed to, there would be no economic chaos like there is now.