ECO 4223 Final Exam Questions and Correct Answers | Latest Update
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Course
ECO
Institution
ECO
If currency held by the public equals $100 billion, reserves held by banks equal $50 billion,
and bank deposits equal $500 billion, then the money supply equals:
A. 150 billion
B. 650 Billion
A
In a system with fractional-reserve banking:
A. All banks must hold reserves equal to a fract...
Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025
ECO 4223 Final Exam Questions and
Correct Answers | Latest Update
If currency held by the public equals $100 billion, reserves held by banks equal $50 billion,
and bank deposits equal $500 billion, then the money supply equals:
A. 150 billion
B. 650 Billion
A
In a system with fractional-reserve banking:
A. All banks must hold reserves equal to a fraction of their loans
B. All banks must hold reserves equal to a fraction of their deposits
B
In a 100% reserve banking system, if a customer deposits $100 currency into a bank, then the
money supply:
A. increases $100
B. remains the same
B
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, Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025
If the ratio of reserves to deposits (rr) increases, while the ratio of currency to deposits (cr) is
constant, and the monetary base (B) is constant, then:
A. The money supply increases
B. The money supply decreases
B
To reduce the money supply, the Fed:
A. buys government bonds
B. sells government bonds
B
When the Fed makes and open-market sale, it:
A. increases the monetary base
B. decreases the monetary base
B
To prevent banks from using excess reserves to make loans that would increase the money
supply, the Fed could conduct open-market _______ and ______ the interest rate paid on
bank reserves:
A. Sales; raise
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, Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025
B. purchases; lower
A
If the fed wishes to increase the money supply it should:
A. decrease the discount rate
B. increase the discount rate
A
Direct loans made to member banks by the Fed are called:
A. discount loans
B. federal funds loans
B
The interest rate charged on loans by the Federal Reserve to banks is called:
A. Federal funds rate
B. Discount rate
B
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