Required Reserves are:

A fixed percentage of a bank's assets

Kind of. It is a very money-like object.

The federal funds rate is:

The cheapest rate banks can pay each other to cover RRR

The Federal Open Market Committee meets to:

Determine whether government bonds should be bought or sold

If an expansionary policy is implemented, then:

Unemployment will fall & inflation will rise

The discount rate is:

The interest rate at which banks borrow money from the Fed

The most common Fed policies involve:

Buying and Selling Government Bonds

If the required reserve ratio went from 10% to 15%, then:

The money supply would decrease, as banks can loan out less

Savings accounts, CD's under $100k, Money Market Accts, + M1

The two types of money demand are:

Asset Demand and Transaction Demand

Which of the following is NOT a characteristic of money?

It must be printed on paper or stamped into coins

The Chairperson of the Federal Reserve

Currency outside of banks, checking accts, travelers checks

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IB Economics Level 6

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An #econ quiz for Level 6 (Money & Banking)

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Questions 33

Answers

1
MB (Monetary Base) is:
Only money outside of banks
All U.S. Currency
Only money held in banks
All money in checking accounts
2
Expansionary Policies include all of the following except:
Buying Government Bonds
Selling Government Bonds
Lowering the RRR
Lowering the discount rate
3
Required Reserves are:
Money kept only in vaults at specific branch banks
25% of a bank's assets
Loaned out at very high interest rates
A fixed percentage of a bank's assets
4
If money supply increases and money demand stays the same, then:
Businesses will borrow less money from banks
Interest rates will decrease
Interest rates will not be affected
Interest rates will increase
5
How many regional banks are in the Fed system?
21
16
10
12
6
Which of these things would be the best unit of account?
A steak
A credit card
A Canadian Dollar
A stone disc
7
Which of these things would be the best medium of exchange?
Stone Discs
Credit Cards
Pennies
IOU's
8
Which of these things has the longest lifespan?
Galapagos Tortoise
Human Being
Greenland Shark
African Elephant
9
Why would the Fed pursue expansionary monetary policy?
All of the above
Interest rates are too high
Inflation is too high
Unemployment is too high
10
Is a $1 Bill money?
No, not whatsoever.
Yes, don't be an idiot
It depends on whether you can still read it
Kind of. It is a very money-like object.
11
Contractionary Policies include all of the following except:
Increasing the RRR
Selling Government Bonds
Increasing the discount rate
Lowering the discount rate
12
If my uncle is 39 and next year I will be half as old as him, how old am I this year?
80
19
20
39
13
The federal funds rate is:
The rate at which banks borrow from the Fed
The nominal interest rate
The cheapest rate banks can pay each other to cover RRR
The rate at which the Fed borrows form banks
14
Which of these Banks was a Hall Of Fame shortstop for the Chicago Cubs?
Ant Banks
Bank Banks
Tyra Banks
Ernie Banks
15
Which of the following famous people have never worked in a bank?
Ray Romano
Steve Jents
Whoopi Goldberg
Michael Jordan
16
The Federal Open Market Committee meets to:
Determine whether the federal funds rate should be changed
Determine whether the RRR should be increased or decreased
Determine whether government bonds should be bought or sold
Determine whether the discount rate should be changed
17
Money a bank has besides its required reserves is called:
Bonds
Loans
Liabilities
Excess Reserves
18
If an expansionary policy is implemented, then:
Unemployment will fall & inflation will rise
Unemployment will rise and inflation will fall
Both unemployment and inflation will fall
Both unemployment and inflation will rise
19
The discount rate is:
The Nominal Interest Rate
The rate at which banks borrow from one another for RRR
The interest rate at which banks borrow money from the Fed
The interest rate at which the Fed borrow money from banks
20
Regional Federal Reserve Banks:
Pass laws affecting monetary policy
Supervise commercial banks
Determine discount rates
Determine stock prices of companies
21
Which of these things would be the best Store of Value?
Stone Discs
Credit Cards
Dollar Bills
IOU's
22
Why would the Fed pursue contractionary monetary policy?
Interest rates are too low
Inflation is too high
All of the above
Unemployment is too high
23
The most common Fed policies involve:
Buying and Selling Government Bonds
Changing the Discount rate
Changing the Required Reserve Ratio
Increasing/Decreasing Government Expenditure Programs
24
If the required reserve ratio went from 10% to 15%, then:
The money supply would increase, as banks can loan out more
The money supply would be unaffected
Interest rates would go down
The money supply would decrease, as banks can loan out less
25
M2 is:
M1 + MB
Savings accounts, CD's under $100k, Money Market Accts, + M1
All money held in banks + M1
Savings accounts, CD's under $100k, Money Market Accounts
26
The United States has a fiat currency, which means:
It is backed by silver
It is backed by nothing
It is backed by gold
It is backed by government securities
27
The two types of money demand are:
Required Reserves and Excess Reserves
Asset Demand and Transaction Demand
Asset Demand and Liability Demand
Who Demand, You Demand
28
Which of the following is NOT a characteristic of money?
It can be used to purchase things
We know how much it is worth
It holds its value over time
It must be printed on paper or stamped into coins
29
Jerome Powell is:
The Head Coach of the Atlanta Falcons
The host of the hit reality show "The Bachelor"
The Chairperson of the Federal Reserve
The President of the Federal Reserve
30
Who is on the $10,000 bill?
George H W Bush
JP Morgan
O'Shea Jackson
Salmon Chase
31
M1 is:
All U.S. Currency
All money outside of banks
Checking accounts, savings accounts, money market accounts
Currency outside of banks, checking accts, travelers checks
32
Which of these things is not like the others?
Paul
John
Ringo
Elvis
33
A bond is best defined as:
A new flavor of Doritos
An IOU
A British Spy
A way to earn money

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