The exchange rate of the New Zealand dollar is stated as

the amount of some other currency to buy one NZD

If banks do not keep sufficient reserves to meet possible withdrawals, they run the risk of

Rumours spreading anda ‘run on the bank’

If you withdrew $100 from your savings account

M1goes up but M2 doesn’t change

The demand for NZD comes from

Foreigners wishing to buy our exports

In the Mr Goldstein example, what was MrGoldstein’s biggest fear

Everyone might bringtheir receipts back at once

A money flow from Households to Business could be

Payments to buy goods andservices

If the NZD depreciates then

NZ exporters will get more NZD and will export more

The forex market is said to be in equilibrium when the exchange rate

Generates thedemand for NZD just equal to the supply of NZD

If you had $200 in cash and you put that into a Term deposit

M1 goes down but M3 doesn't change

If $1 NZ used to buy $0.70 AU, but now buys $0.80 AU then

The NZ dollar has appreciated against the Australian dollar

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Burnside 10BEA Money

18 termsStudBud Administration186 plays

End of Topic Money for BEA Foreign Exchange Characteristics of Money Money supply

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Questions 18

Answers

1
The exchange rate of the New Zealand dollar is stated as
the average cost to buy all other currencies
the amount of NZD to buy some other currency
the amount of some other currency to buy one NZD
the price in NZD to buy $US 1.00
2
If banks do not keep sufficient reserves to meet possible withdrawals, they run the risk of
Losing potentialprofit by having idle funds
Being fined by theReserve Bank
Rumours spreading anda ‘run on the bank’
People with loansrepaying them early
3
If you withdrew $100 from your savings account
M1 doesn’t change but M2 goes down
M1goes up but M2 doesn’t change
M1 goes up and M2 goes down
M1 and M2 do not change
4
If you withdrew $300 from your cheque account at an ATM
M1 and M3 do not change
M1 goes up and M3 do not change
M1 doesn’t change but M2 goes up
M1 goes down and M2 goes up
5
The largest component of M1 is
Cheque accounts
Term deposits
Shares
Savings Accounts
6
The demand for NZD comes from
New Zealanders wishing to travel abroad
Foreigners wishing to buy our exports
Foreigners wishing to sell us their exports
New Zealandfirms wishing to buy imports
7
In the Mr Goldstein example, what was MrGoldstein’s biggest fear
They would get robbed
People didn’t likeJewish moneylenders
People might learn hewas charging usury [interest]
Everyone might bringtheir receipts back at once
8
A money flow from Households to Business could be
Payments to buy goods andservices
Export receipts
Other taxes and rates paidby households
PAYE tax and ACC
9
A money flow from Business to Government could be
Company tax payments
Finance for businessinvestment
Subsidies received bybusiness
Import payments
10
The Official money Supply in New Zealand is
M2
M1+M2 + M3
M1
M3
11
The supply of NZD comes from
NZ consumers who have bought online from overseas
New Zealand firms wishing to buy imports
New Zealanders wishing to travel abroad
all of the above
12
If the NZD depreciates then
NZ exporters will get less NZD and will export less
NZ exporters will get more NZD and will export more
Overseas tourists will find holidays in NZ more expensive
NZ tourists will find holidays overseas cheaper,more will go
13
The forex market is said to be in equilibrium when the exchange rate
Equals 1
Is at its highest point
Generates thedemand for NZD just equal to the supply of NZD
None of the above
14
If you had $200 in cash and you put that into a Term deposit
M1 and M3 do not change
M1 goes down but M3 doesn't change
M1 doesn’t change but M3 goes up
M1 goes down and M3 goes up
15
Characteristics of what makes useful money include
All of the above
Recognisable, Acceptable, Traceable
Valuable, Counterfeitable,Divisible
Durable, Portable,Divisible
16
If $1 NZ used to buy $0.70 AU, but now buys $0.80 AU then
The NZ dollar has appreciated against the Australian dollar
Australian tourists coming to NZ will feel better off
The NZ dollarhas depreciated against the Australian dollar
New Zealandersgoing to Australia will be worse off
17
If USD 0.80 =NZD 1.00 then
All of the above
$80 NZ willbuy $100 US
$100 NZ will buy $800 US
$1.25 NZ will buy $1.00 US
18
NZ pension fund lost $200m.It was invested in a Portuguese bank which collapsed,probably due to
Making too many risky loans
Accepting toomany deposits
Not lending enough loans to make a profit
Scamming the NZ super fund

Burnside 10BEA Money Flashcards | StudBud