Which of the following appears on the liability side of the Fed's balance sheet?
a. Federal Reserve notes.
b. U.S. government securities.
c. Loans to banks.
d. All of these.
QUESTION 2If the banking system's money multiplier is 4, then a 2,000 increase in checkable deposits when banks hold excess reserves will result in which of the following events?
a. The money supply will decrease
b. The money supply will not change.
c. The money supply will increase by exactly 8,000.
d. The money supply will increase by more than 8,000.
e. The money supply will increase by less than 8,000.
QUESTION 3A country can develop without a large natural resource base.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4When the required reserve ratio is 20 percent, the money multiplier is:
a. 0.2.
b. 1.2.
c. 2.
d. 2.5.
e. 5.
QUESTION 5A country cannot develop without a large natural resource base.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6Because the banking system operates using fractional reserves,
a. the money multiplier is greater than one.
b. excess reserves are equal to zero.
c. required reserves are equal to 100 percent.
d. banks can loan out only their required reserves.
e. the money multiplier must be equal to zero.
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