IHSS 1200 Chapter 16 Comprehensive Actual Questions And Well Elaborated Answers.
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Course
IHSS.
Institution
IHSS.
The U.S. dollar can best be described as - correct answer fiat money
Which of the following is NOT a function of money? - correct answer Acceptability
The use of money - correct answer ...
The U.S. dollar can best be described as - correct answer fiat money
Which of the following is NOT a function of money? - correct answer
Acceptability
The use of money - correct answer - allows for greater specialization
- reduces the transaction costs of exchange
-eliminates the double coincidence of wants
Credit cards are - correct answer included in neither the M1 definition of the
money supply nor in the M2 definition.
The figure to the right shows a breakdown of the
M1 definition of the money supply in 2017. Which area corresponds to the amount of checking account
deposits? - correct answer C (The largest area)
The M2 definition of the money supply includes - correct answer M1, savings
accounts, small time deposits, and money markets
Banks use deposits to make consumer loans to households and commercial loans to businesses. Banks
will loan out every penny of their deposits in order to make a profit. - correct answer
False. Banks must hold a fraction of their deposits as vault cash or with the Federal Reserve.
Suppose the reserve requirement is 15%. What is the effect on total checkable deposits in the economy
if bank reserves increase by $50 billion? - correct answer $333 billion increase
, An initial increase in a bank's reserves will increase
checkable deposits - correct answer by an amount greater than the increase in
reserves.
In 2008, the required reserve ratio for a bank's first $9.3 million in checking account deposits was zero. It
was 3 percent on deposits between $9.3 million and $43.9 million, and 10 percent on deposits above
$43.9 million. In most cases, and for simplicity, we assume that the required reserve ratio is 10 percent
on all deposits. Therefore, the simple deposit multiplier is 10.
Is the real-world deposit multiplier greater than, less than, or equal to the simple deposit multiplier? -
correct answer Less. The simple deposit multiplier is a model with
assumptions that keep it higher than the real-world multiplier.
In a fractional reserve banking system, what is the difference between a "bank run" and a "bank panic?"
- correct answer A bank run involves one bank; a bank panic involves many
banks.
The United States is divided into ___ Federal Reserve Districts.
The Federal Reserve Bank's Board of Governors consists of ___ members appointed by the president of
the U.S. to 14-year, non-renewable terms.
One of the board members is appointed to a ___ year, renewable term as the chairman. - correct
answer 12; 7; 4
Which of the following is a
monetary policy tool used by the Federal Reserve Bank? - correct answer
Increasing the reserve requirement from 10 percent to 12.5 percent; Buying $500 million worth of
government securities, such as Treasury bills; Decreasing the rate at which banks can borrow money
from the Federal Reserve
In addition to the Federal Reserve Bank, what other economic actors influence the money supply? -
correct answer Households, firms, and banks.
Which of the following is true with respect to hyperinflation? - correct answer
In the presence of hyperinflation, firms and households avoid holding money; It is caused by central
banks increasing the money supply at a rate much greater than the growth rate of real GDP; It can be
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