Economics

Narnia National Bank has $750 million in deposits. The required reserve ratio is 30%. Narnia ...

Narnia National Bank has $750 million in deposits. The required reserve ratio is 30%. Narnia ...

[html]Question 1.Crescent City Bank has $200 million in deposits. Crescent City Bank is meeting its reserve requirement and has no excess reserves. It has $40 million in reserves. Crescent City Bank faces a required reserve

treetreee   56   1 Reply

kirakira15

The Bank of Red Oak has $2 million in deposits and $400,000 in reserves. If excess reserves are ...

The Bank of Red Oak has $2 million in deposits and $400,000 in reserves. If excess reserves are ...

[html]Question 1.The Bank of Arugula has $9 million in deposits and $900,000 in reserves. If the required reserve ratio is 10%, excess reserves are equal to

▸ $180,000.

▸ $90,000.

▸ $81,000.

▸ zero.

jmoney5   66   1 Reply

gdchavis1

The required reserve ratio is 50%. The money multiplier is

The required reserve ratio is 50%. The money multiplier is

[html]Question 1.Suppose the required reserve ratio is 15%. A $10 million deposit will, at most, allow an expansion of the money supply to

▸ $250 million.

▸ $150 million.

▸ $147.5 million.

▸ $66.7 million.

Tneary   63   1 Reply

Andreasnlnvld

Futura Bank has liabilities of $8 million and net worth of $1,200,000. Futura Bank's assets are

Futura Bank has liabilities of $8 million and net worth of $1,200,000. Futura Bank's assets are

[html]Question 1.As commercial banks keep more excess reserves, money creation

▸ increases.

▸ decreases.

▸ remains the same.

▸ could either increase or decrease.Question 2.Futura

justinw2200   72   1 Reply

rand22

Bank of Mt. Etna has $500 million in deposits. Bank of Mt. Etna is meeting its reserve requirement ...

Bank of Mt. Etna has $500 million in deposits. Bank of Mt. Etna is meeting its reserve requirement ...

[html]Question 1.A commercial bank lists net worth as

▸ an asset.

▸ a liability.

▸ retained earnings.

▸ excess reserves.Question 2.Bank of Mt. Etna has $500 million in deposits.

Coltonht   75   1 Reply

vande746

The Bank of Mesquite has $2 million in deposits and $550,000 in reserves. If excess reserves are ...

The Bank of Mesquite has $2 million in deposits and $550,000 in reserves. If excess reserves are ...

[html]Question 1.The Bank of Biscayne has $12 million in deposits and $800,000 in reserves. If the required reserve ratio is 5%, excess reserves are equal to

▸ $720,000.

▸ $600,000.

▸ $200,000.

▸ $40,000.

banggedung   107   1 Reply

dnlee1

The required reserve ratio is 12.5%. The money multiplier is

The required reserve ratio is 12.5%. The money multiplier is

[html]Question 1.Suppose the required reserve ratio is 25%. A $10 million deposit allows commercial banks to create at most

▸ $2.5 million.

▸ $4 million.

▸ $40 million.

▸ $250 million.Question 2

LilyGal   65   1 Reply

jackjohnson74

Among the assets of commercial banks are demand deposits.

Among the assets of commercial banks are demand deposits.

[html]Question 1.Excess reserves in a bank are the difference between required reserves and the bank's total net worth.

▸ true

▸ falseQuestion 2.Among the assets of commercial bank

Ilovebacon22   61   1 Reply

krobdance

Banks are legally required to hold a percentage of all deposits as reserves.

Banks are legally required to hold a percentage of all deposits as reserves.

[html]Question 1.Since they must lend money to make money, all banks are necessarily insolvent.

▸ true

▸ falseQuestion 2.Banks are legally required to hold a percentage of all depo

caillacakes   55   1 Reply

emr21

Among the assets of commercial banks are excess reserves.

Among the assets of commercial banks are excess reserves.

[html]Question 1.If a bank has $32 million in deposits and the required reserve ratio is 4 percent, the bank's required reserves equal $0.8 million.

▸ true

▸ falseQuestion 2.Among

Crystalboo92   51   1 Reply

beunikuel

The President of the NY Federal Reserve Bank is always a member of the Federal Open Market Committee.

The President of the NY Federal Reserve Bank is always a member of the Federal Open Market Committee.

[html]Question 1.Which of the following activities is one of the responsibilities of the Federal Reserve?

▸ issuing new bonds to finance the federal budget deficit

▸ loaning money to other countries that are friendly

LilyGal   83   1 Reply

Jennyyy

The Fed is a nonprofit institution whose function is to serve the overall welfare of the public.

The Fed is a nonprofit institution whose function is to serve the overall welfare of the public.

[html]Question 1.The Fed is also known as a "banker's bank."

▸ true

▸ falseQuestion 2.The Fed is a nonprofit institution whose function is to serve the overall welfare of the publi

Migo7s   77   1 Reply

vande746

Which of the following causes the quantity of money demanded to increase?

Which of the following causes the quantity of money demanded to increase?

[html]Question 1.If interest rates increase to a very high level, people will most likely hold

▸ more money in savings accounts and less cash.

▸ less money in savings accounts and less cash.

▸ less money in savings a

Tneary   61   1 Reply

BobbyD

The amount of money you should hold depends negatively on the interest rate.

The amount of money you should hold depends negatively on the interest rate.

[html]Question 1.A decrease in nominal income will lead to an increase in the interest rate.

▸ true

▸ falseQuestion 2.The amount of money you should hold depends negatively on the

toripollard8   70   1 Reply

tlaster

When interest rates fall, bond values rise.

When interest rates fall, bond values rise.

[html]Question 1.Short-term securities are usually called ________ and long-term securities are usually called ________.

▸ notes; bills

▸ loans; notes

▸ bonds; stocks

▸ bills; bondsQuestion 2.

FAITHBELLE   56   1 Reply

ShaeTime3

Bonds are issued with either a face value or a maturity date, but not both.

Bonds are issued with either a face value or a maturity date, but not both.

[html]Question 1.When interest rates rise, security values rise.

▸ true

▸ falseQuestion 2.Bonds are issued with either a face value or a maturity date, but not both.

▸ true

▸

lihui   68   1 Reply

zachcarytcris

The money supply has increased from $1.4 trillion to $1.45 trillion. Which of the following could ...

The money supply has increased from $1.4 trillion to $1.45 trillion. Which of the following could ...

[html]Question 1.If the Fed sells government securities, then there is

▸ an increase in the supply of money.

▸ a decrease in the supply of money.

▸ a decrease in the discount rate.

▸ an increase in the required rese

whatsupgirl16   55   1 Reply

nick1116

The money supply has decreased from $2.75 trillion to $2.25 trillion. Which of the following could ...

The money supply has decreased from $2.75 trillion to $2.25 trillion. Which of the following could ...

[html]Question 1.A decrease in the discount rate will most likely

▸ decrease the money supply.

▸ not effect the money supply.

▸ increase the money supply.

▸ have an unclear affect on the money supply.

caillacakes   53   1 Reply

Bakari

The discount rate cannot be used to control the money supply with great precision because its ...

The discount rate cannot be used to control the money supply with great precision because its ...

[html]Question 1.A sale of government securities to the public by the Federal Reserve will increase the money supply.

▸ true

▸ falseQuestion 2.The discount rate cannot be used to c

achalmers   79   1 Reply

sliceofoctopi

By value, a majority of the assets held by the Fed is in gold.

By value, a majority of the assets held by the Fed is in gold.

[html]Question 1.As of April 2015, the Fed no longer holds any mortgage-backed securities or federal agency debt securities as assets.

▸ true

▸ falseQuestion 2.By value, a majority

Suedyso   57   1 Reply

Woo

If the measured unemployment rate is 8% and the natural unemployment rate is 3%, then

If the measured unemployment rate is 8% and the natural unemployment rate is 3%, then

[html]Question 1.If the Fed lowered the reserve requirement, banks would have less money to loan out.

▸ true

▸ falseQuestion 2.If the measured unemployment rate is 8% and the natur

Yessi15   69   1 Reply

tlaster

The natural rate of unemployment is unemployment that occurs as a normal part of the functioning of ...

The natural rate of unemployment is unemployment that occurs as a normal part of the functioning of ...

[html]Question 1.If the unemployment rate rises above the natural rate of unemployment in the short run, the inflation rate will rise.

▸ true

▸ falseQuestion 2.The natural rate of

whatsupgirl16   55   1 Reply

zachcarytcris

At the natural rate of unemployment, the economy can be considered to be at full employment.

At the natural rate of unemployment, the economy can be considered to be at full employment.

[html]Question 1.The long-run Phillips curve corresponds to the natural rate of unemployment.

▸ true

▸ falseQuestion 2.At the natural rate of unemployment, the economy can be consi

yufeige4   62   1 Reply

eltoro

When the economy is producing at full capacity, the aggregate supply curve becomes

When the economy is producing at full capacity, the aggregate supply curve becomes

[html]Question 1.If the economy is operating way below capacity, an increase in aggregate demand causes a ________ change in the price level and ________ change in output.

▸ big; big

▸ big; small

▸ small; big

▸ smal

anthonydel117   69   1 Reply

Matt. DeSouza

If input prices change at exactly the same rate as output prices, the aggregate supply curve will be vertical.

If input prices change at exactly the same rate as output prices, the aggregate supply curve will be vertical.

[html]Question 1.The rationale underlying policies to deregulate the economy is that these policies would

▸ increase aggregate demand.

▸ decrease short-run aggregate supply.

▸ decrease aggregate demand.

▸ increase s

joanne1718   66   1 Reply

Brittany08196

The aggregate supply curve is probably better thought of as a price/output response curve.

The aggregate supply curve is probably better thought of as a price/output response curve.

[html]Question 1.Since aggregate supply is the total supply of all goods and services in the economy, the aggregate supply curve is the sum of the individual supply curves for each of these goods and services.

▸ true

justinw2200   65   1 Reply

osvaldoguzman

The level of aggregate output demanded falls when the price level rises, because the resulting ...

The level of aggregate output demanded falls when the price level rises, because the resulting ...

[html]Question 1.The quantity of aggregate output demanded will fall if

▸ government spending increases.

▸ the price level increases.

▸ Aggregate supply increases.

▸ net taxes are reduced.Questi

jujubee600   70   1 Reply

h00304413

Which of the following sequence of events follows a decrease in the discount rate?

Which of the following sequence of events follows a decrease in the discount rate?

[html]Question 1.Which of the following sequence of events follows an open market sale by the Fed?

▸ r↑ ⇒ I↓ ⇒ AE↓ ⇒ Y↓

▸ r↑ ⇒ I↑ ⇒ AE↓ ⇒ Y↑

▸ r↓ ⇒ I↑ ⇒ AE↑ ⇒ Y↑

▸ r↓ ⇒ I↓ ⇒ AE↓ ⇒ Y↓Question 2.

tlc_71111   67   1 Reply

jfinn1021

An increase in the price level cause aggregate demand to increase.

An increase in the price level cause aggregate demand to increase.

[html]Question 1.The aggregate demand curve shows that at higher price levels the total quantity of output demanded is greater.

▸ true

▸ falseQuestion 2.An increase in the price le

PiMaster314   74   1 Reply

jackjohnson74

As the interest rate decreases, the planned aggregate expenditure curve shifts downward.

As the interest rate decreases, the planned aggregate expenditure curve shifts downward.

[html]Question 1.The Fed is leaning against the wind when it sets a high interest rate during a recession.

▸ true

▸ falseQuestion 2.As the interest rate decreases, the planned aggr

autumnnelson123   64   1 Reply

yesimshay

Which of the following will, unambiguously, increase the price level?

Which of the following will, unambiguously, increase the price level?

[html]Question 1.All else equal, when output is low, the Fed favors a higher interest rate than it would in a high-output economy.

▸ true

▸ falseQuestion 2.Which of the following w

FAITHBELLE   51   1 Reply

linds

An increase in the price of inputs will most likely lead to a higher price level.

An increase in the price of inputs will most likely lead to a higher price level.

[html]Question 1.Whenever the aggregate supply curve intercepts the aggregate demand curve, the economy is producing full employment output.

▸ true

▸ falseQuestion 2.An increase in

malabranche13   57   1 Reply

cuddahy99

If the price level falls, the aggregate supply increases as a result of the aggregate demand curve ...

If the price level falls, the aggregate supply increases as a result of the aggregate demand curve ...

[html]Question 1.Decreasing government spending and and an oil embargo will both have an effect towards increasing the price level.

▸ true

▸ falseQuestion 2.If the price level fall

Gideon123   70   1 Reply

anuja709

A decrease in the price level raises the real value of wealth.

A decrease in the price level raises the real value of wealth.

[html]Question 1.The real wealth effect explains why the aggregate supply curve is horizontal in the long run.

▸ true

▸ falseQuestion 2.A decrease in the price level raises the rea

studymite   43   1 Reply

whoohoo8

When the ________ increases, then potential output increases.

When the ________ increases, then potential output increases.

[html]Question 1.If ________ equilibrium output ________, the price level rises.

▸ actual; is below potential GDP

▸ potential; is equal to actual GDP

▸ potential; exceeds actual GDP

▸ actual; exceeds potential GDP

asprague24   57   1 Reply

mnp2357

Potential output is the most that can be produced in an economy at a particular point in time.

Potential output is the most that can be produced in an economy at a particular point in time.

[html]Question 1.If the economy produces full employment output, an increase in government spending increases output but not the price level.

▸ true

▸ falseQuestion 2.Potential out

elbthwtkns01   71   1 Reply

javiermorilla

An increase in government spending will completely crowd out investment if

An increase in government spending will completely crowd out investment if

[html]Question 1.Potential output is the same as long-run aggregate supply.

▸ true

▸ falseQuestion 2.An increase in government spending will completely crowd out investment if

trea48   66   1 Reply

Lori734

Expansionary economic policies are things the government can do to decrease aggregate demand or ...

Expansionary economic policies are things the government can do to decrease aggregate demand or ...

[html]Question 1.Economic policies are effective at changing output when

▸ the economy is not producing at capacity.

▸ the economy is producing at its potential output.

▸ the unemployment rate is at the natural rate.

SalaDinHo   71   1 Reply

emnevius

If wages adjust fully to price increases, fiscal policy will have no effect on output in the long run.

If wages adjust fully to price increases, fiscal policy will have no effect on output in the long run.

[html]Question 1.When the economy is near capacity, the Fed would lower the interest rate in response to an increase in government spending.

▸ true

▸ falseQuestion 2.If wages adjus

lihui   63   1 Reply

jenniferagrethe

If equilibria below potential output are self-correcting, the economy will spend a great deal of ...

If equilibria below potential output are self-correcting, the economy will spend a great deal of ...

[html]Question 1.If wages quickly adjust to price changes, the aggregate supply curve quickly becomes vertical.

▸ true

▸ falseQuestion 2.If equilibria below potential output are se

Lighting2551   71   1 Reply

Gparker