In the United States, monetary policy is the responsibility of the

Board of Governors of the Federal Reserve System

what are the two types of demand for money?

transaction demand for money, asset demand for money

Currency held in the vault of First National Bank is

not counted as part of the money supply

If the commercial banking system borrows from the Federal Reserve Banks. As a result, the checkable deposits

of commercial banks are unchanged, but their reserves increase

Open Market Operations refer to

the purchase or sale of govt securities by the Fed

Assume the legal reserve ratio is 25% and the National Bank borrows $10,000 from the Fed in its district. As a result

commercial bank reserves are increased by $10,000

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Quiz- 2 Macro-review

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Answers

1
In the United States, monetary policy is the responsibility of the
Board of Governors of the Federal Reserve System
Bureau of Economic Analysis
U.S. Treasury
U.S. Congress
2
Currency in circulation is part of
M2
Both M1 & M2
Neither M1 & M2
M1
3
The asset demand for money is most closely related to money functioning as a
store of value
medium of exchange.
unit of account
measure of value
4
what are the two types of demand for money?
store of money
international value of money
transaction demand for money
asset demand for money
5
Currency held in the vault of First National Bank is
only counted as part of M1 if it was deposited into a checking account
counted as part of M2 but not M1
counted as part of M1
not counted as part of the money supply
6
If the commercial banking system borrows from the Federal Reserve Banks. As a result, the checkable deposits
and reserves of commercial banks both decrease.
of commercial banks are unchanged, but their reserves decrease
of commercial banks are unchanged, but their reserves increase
and reserves of commercial banks are both unchanged.
7
The transaction demand for money is most closely related to money functioning as a
store of value
medium of exchange.
measure of value
unit of account.
8
Paper money (currency) in the United States is issued by the
U.S. Treasury
Federal Reserve Bank
Bank of America
U.S. Mint
9
In the United States, the money supply (M2) includes Coins
False
True
10
Open Market Operations refer to
the specifying of loan maximums on stock purchases
the purchase or sale of govt securities by the Fed
central bank lending to commercial banks.
purchases of stocks in the New York Stock Exchange.
11
Assume the legal reserve ratio is 25% and the National Bank borrows $10,000 from the Fed in its district. As a result
the supply of money automatically declines by $7,500
commercial bank reserves are increased by $10,000
the supply of money is automatically increased by $10,000
commercial bank reserves are increased by $7,500.

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