Unit 5: The Financial Sector

Reserves-$27,000 Demand Deposits-$110,000 RR-20%. What is the excess reserves

The multiple banks can expand the supply of money is equal to the reciprocal of

In the United States M1 is comprised all of these except

Fiat money is

Under which condition should you use contractionary (tight money) monetary policy

Bank ABC has an ER of $4,000 and Demand Deposits of $80,000. RR-25%. Reserve Size is

T/F, easy money policy will ↓ the foreign demand for the US $

When a commercial bank borrows from a Federal reserve bank

T/F the federal funds market is where banks borrow reserves from one another on overnight basis

Identify this graph

T/F checking accounts are also known as demand deposits

What is the purpose of tight money policy

In terms of volume or dollar amount, most $ in the US economy is created by

Which of these groups is responsible for monetary policy in the US

Which of these would increase the money supply

What is the main purpose of a legal reserve requirement

When we say money is a medium of exchange, we mean it is

T/F tight money will cause $ to appreciate and decrease US net exports

The amount a commercial bank can lend is determined by

T/F open-market operations involve buying and selling gov bonds/securities by the Fed

Banks create money when they

Identify this graph

T/F, in the short term money supply ↑ will briefly create money surplus and ↓ interest rate

The money functions are

The money supply is currently backed

Which of these is a tool(s) of monetary policy

The Fed sells $500,000 in government securities. If banks have no ER and RR is 20%. $ supply

What will happen to real interest rates and real outputs if the money supply increases

Which of these is true about the Federal reserve?

Reserves in a commercial bank include