Question
1.1.(TCO
7) If you write a check on a bank to purchase a used Honda Civic, you are
using money primarily as (Points : 1)
a medium of exchange.
a store of value.
a unit of account.
an economic investment.
Question
2.2.(TCO
7) In the United States, the money supply (M1) is
comprised of (Points
: 1)
coins, paper currency, and
checkable deposits.
currency, checkable deposits,
and Series E bonds.
coins, paper currency,
checkable deposits, and credit balances with brokers.
paper currency, coins, gold
certificates, and time deposits.
Question 3.3.(TCO 7) Answer the
question on the basis of the following list of assets:
1. Large-denominated
($100,000 and more) time deposits
2. Noncheckable savings
deposits
3. Currency (coins and
paper money) in circulation
4. Small-denominated
(less than $100,000) time deposits
5. Stock certificates
6. Checkable deposits
7. Money market deposit
accounts
8. Money market mutual
fund balances held by individuals
9. Money market mutual
fund balances held by businesses
10. Currency held in
bank vaults
Refer
to the above list. The M2 definition of
money comprises
(Points
: 1)
items 2, 3, 4, 6, 7, 8, and 10.
items 3, 4, 5, and 6.
items 2, 3, 4, 6, 7, and 8.
all of the items listed.
Question
4.4.(TCO
7) Assume Company X deposits $100,000 in cash in Commercial Bank A.
If no excess reserves exist at the time this deposit is made and the
reserve ratio is 20 percent, Bank A, by itself, can initially
increase the money supply by a maximum of (Points : 1)
$50,000.
$180,000.
$80,000.
$500,000.
Question
5.5.(TCO
7) The federal funds market is the market in which (Points : 1)
banks borrow from the Federal
Reserve Banks.
U.S. securities are bought and
sold.
banks borrow reserves from one
another on an overnight basis.
Federal Reserve Banks borrow
from one another.
Question
6.6.(TCO
7) When a bank loan is repaid, the supply of money (Points : 1)
is constant, but its
composition will have changed.
is decreased.
is increased.
may either increase or
decrease.
Question
7.7.(TCO
7) The transactions demand for money is most closely related to money
functioning as a (Points
: 1)
unit of account.
medium of exchange.
store of value.
measure of value.
Question
8.8.(TCO
7) It is costly to hold money because (Points : 1)
deflation may reduce its
purchasing power.
in doing so, one sacrifices
interest income.
bond prices are highly
variable.
the rate at which money is
spent may decline.
Question
9.9.(TCO
7) Which of the following is not a tool of monetary
policy? (Points
: 1)
Open market operations
Changes in banking laws
Changes in the amount of
reserves available at the term auction facility
Changes in the reserve ratio
Question
10.10.(TCO
7) The purpose of an expansionary monetary policy is to shift the (Points : 1)
Solution: devry eco312 week 6 quiz