If the Fed increased the discount rate, which of the following would take place

the NIR would increase because MS would decrease

If business confidence decreased, what would happen to the RIR?

decrease because DLF would decrease

A central bank purchase of bonds would do what to the NIR?

decrease because MS would increase

Which of the following would increase the real interest rate level?

decrease in foreign capital inflows

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Unit 4 Review- Money and Banking AP Macro

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Review of money, central banking, money multiplier, money market, and loanable funds market

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Questions 12

Answers

1
If government borrowing decreased, what would happen to the real interest rate level?
decrease
increase
stay same
2
If $300 was withdrwn in cash from a customer's checking account,was is immediate change to M1?
-$600
no change
-$300
+$300
3
If the Fed increased the discount rate, which of the following would take place
the NIR would decrease because MS would increase
the NIR would increase because MS would decrease
the NIR would increase because MD would decrease
the NIR would decrease because MD would decrease
4
If the Fed wanted to decrease interest rate levels, what could they do?
decrease money demand
decrease the discount rate
sell bonds
increase the RRR
5
Demand deposits=$100, RRR=25%, what would initial excess reserves be?
$75
$25
$400
$100
6
If business confidence decreased, what would happen to the RIR?
decrease because DLF would increase
decrease because SLF would increase
decrease because DLF would decrease
increase because SLF would increase
7
If the Fed bought $500 worth of bonds and the RRR was 10%, how much would MS increase?
$50
$4,500
$5,000
$500
8
Which of the following is NOT included in the M2 money supply?
savings
money market accounts
stock
Certificates of Deposit
9
A central bank purchase of bonds would do what to the NIR?
decrease because MD would decrease
increase because MS would increase
increase because MD would increase
decrease because MS would increase
10
The Fed selling bonds to banks would do what to the money supply?
stay same
decrease
increase
11
With a cash deposit of $100 and a RRR of 50%, how much will the total money supply be?
$100
$200
$50
$150
12
Which of the following would increase the real interest rate level?
Fed purchase of bonds
decrease in foreign capital inflows
decrease in consumer borrowing
decrease price level

Unit 4 Review- Money and Banking AP Macro Flashcards | StudBud