devry econ312n Week 7 quiz latest 2016 July.

1) The table shows a? bank's balance sheet. The bank has no excess reserves and there is no currency drain.

Calculate the? bank's desired reserve ratio.

The? bank's desired reserve ratio is ____ percent of deposits.

2) The graph shows the aggregate supply curve and the aggregate demand curve for an economy.

Draw an aggregate demand curve that shows the effect of a? $100 billion decrease in government expenditure. Label it AD1.

A? $100 billion increase in taxes would shift the aggregate demand curve? ______.

A. leftward but not as far leftward as a? $100 billion decrease in government expenditure

B. rightward by an amount less than? $100 billion

C. rightward by an amount greater than? $100 billion

D. leftward by a greater amount than a? $100 billion decrease in government expenditure

3) A savings and loan association has

$550 in checkable deposits

?$1,810 in home loans

?$950 in savings deposits

?$550 in government securities

?$900 in time deposits

?$40 in currency

No deposit at the Fed.

Calculate the? S&L's loans and reserves.

The? S&L's loans are ?$_______.

The? S&L's reserves are ?$____.

4) The graph shows the economy of Artica. Potential GDP is? $300 billion.

Draw the potential GDP line. Label it.

Draw a point at the equilibrium price level and real GDP. Label it 1.???

Draw a curve that shows what happens if the central bank takes no monetary policy action and the economy returns to potential GDP. Label it.Draw a point at the new equilibrium price level and real GDP. Label it 2.

To return the economy to full? employment, the central bank of Artica can? ______.

A. make an open market sale

B. make an open market purchase

C. raise the exchange rate

D. raise the federal funds rate

5) Suppose that at the end of December? 2009, banks' reserves at the Fed were ?$20 ?billion, Federal Reserve notes were ?$750 ?billion, and the quantity of coins was ?$10 billion.

Calculate the monetary base in the United States.

The monetary base in the United States is ?$________billion.

6) Indicate whether each of the statements below is true of the Great Depression or the 2008–2009 recession.

The Fed flooded the banks with the reserves that they wanted to hold.

The Fed did not inject reserves into the banks.

The quantity of M2 crashed.

The quantity of M2 increased.

7) A bank has the following deposits and? assets:

Checkable? deposits, ?$300??

Savings? deposits, ?$1,320

Small time? deposits, ?$550

Loans to? businesses, ?$1,590

Outstanding credit card? balances, ?$325

Government? securities, ?$250

?Currency, ?$5

Reserve account at the? Fed, ?$6

Calculate the? bank's total deposits and the amount of deposits that are part of M1 and M2.

The? bank's total deposits are ?$_____.

Deposits that are part of M1 are ?$_____.

Deposits that are part of M2 are ?$________.

8) The table shows a? bank's balance sheet. The desired reserve ratio on all deposits is 5 percent. There is no currency drain.

What is the quantity of loans and the quantity of total deposits when the bank has no excess? reserves?

The total quantity of loans after the bank has lent all its excess reserves is $_______ million.

The total quantity of deposits after the bank has lent all its excess reserves is $_______ million.

9) List the sequence of events in the transition from a fall in the federal funds rate to a change in the inflation rate.

The Fed lowers the federal funds rate.

Other? short-term interest rates ________ and the exchange rate ________.

The quantity of money and supply of loanable funds _______

The? long-term real interest rate __________.

Consumption? expenditure, investment, and net exports ___________.

Aggregate demand __________.

Real GDP growth rate _________

Inflation rate _______ .

10) A savings and loan association has

?$700 in checkable deposits

?$1,960 in home loans

?$1,050 in savings deposits

?$500 in government securities

?$750 in time deposits

?$40 in currency

No reserve deposit at the Fed.

Calculate the? S&L's total? deposits, deposits that are part of? M1, and deposits that are part of M2.

The? S&L's total deposits are ?$_____.

Deposits that are part of M1 are ?$______.

Deposits that are part of M2 are ?$______.

11) The currency drain ratio is 0.2 and the desired reserve ratio is 0.5.

What is the money? multiplier?

The money multiplier is ____.

12) The table gives information from a? bank's balance sheet.

Calculate the? bank's loans,? securities, and reserves.

The? bank's loans are ?$______ million.

The? bank's securities are ?$____ million.

The? bank's reserves are ?$___ million.

13) The table shows a? bank's balance sheet. The desired reserve ratio on all deposits is 11 percent. There is no currency drain.

Calculate the? bank's excess reserves. If the bank uses all of these excess reserves to make a? loan, what is the quantity of the loan and the quantity of total deposits after the bank has made the? loan?

The? bank's excess reserves are ?$____ million.

The bank will loan ?$____ million.

The quantity of total deposits after the bank has made the loan is ?$_____ million.

14) In December2001?, currency held by individuals and businesses was ?$581 ?billion; traveler's checks in circulation were $8 ?billion; checkable deposits owned by individuals and businesses were $593 ?billion; money market funds and other deposits were $982 ?billion; M2 was $5,452?; and savings deposits were $2,313 billion.

Calculate M1 in December 2001. Calculate small time deposits in December 2001.

In December 2001 M1 was ?$_____ billion.

Small time deposits in December 2001 were ?$________ billion.

15) The graph shows the economy in a recession.

Draw a curve that shows the effect of a fiscal stimulus. Label it.

Draw a point at the new macroeconomic equilibrium.

16) Suppose that in September 2009 in the United? States, the monetary base in the United States was $845 ?billion, commercial banks' deposits at the Fed were $20 ?billion, and Federal Reserve notes were $800 billion.

Calculate the quantity of coins.

The quantity of coins was?$____ billion.

17) The graph shows the aggregate demand curve and the aggregate supply curve for an economy.

Draw an aggregate demand curve that shows the effect of a? $100 billion decrease in taxes. Label it AD1.The magnitude of the tax multiplier is equal to? ______.

A. the magnitude of the government expenditure multiplier divided by the marginal propensity to consume

B. an amount greater than the government expenditure multiplier

C. 1

D. the marginal propensity to consume multiplied by the magnitude of the government expenditure multiplier

18) The table shows the amounts held as the various components of M1 and M2.

Calculate the value of M1 and M2.

The value of M1 is?$_______ billion.

The value of M2 is $______ billion.

19) The Fed thinks that an inflationary gap is emerging and takes actions to avoid its consequences.

Draw a curve to show the change in initial aggregate demand following the actions of the Fed. Label the curve AD0minus?E.

Draw a curve to show the multiplier effect on aggregate demand that returns the economy to a? full-employment equilibrium. Label the curve AD1.

Draw a point at the? full-employment quantity of real GDP and price level.

20) A bank holds ?$7 for every? $100 in deposits.

The bank wants to hold ?$4 for every? $100 in deposits.

The bank holds desired reserves of ?$9,000 and actual reserves of ?$22,000.?

What is the actual reserve? ratio, the desired reserve? ratio, and the excess reserves??

The actual reserve ratio is .______.

The desired reserve ratio is .________.

The excess reserves are ?$________.