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| 1 | |
Which of the following is not part of the U.S. money supply (M1)? |
| | A) | Coins |
| | B) | Paper currency |
| | C) | Checkable deposits |
| | D) | Time deposits ("CDs") |
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| 2 | |
Writing a check to purchase a new computer is an example of using money primarily as a: |
| | A) | unit of account. |
| | B) | standard of value. |
| | C) | medium of exchange. |
| | D) | store of value. |
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| 3 | |
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Refer to the table. The size of the M2 money supply is: |
| | A) | $2,950 billion. |
| | B) | $4,850 billion. |
| | C) | $4,875 billion. |
| | D) | $6,275 billion. |
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| 4 | |
During the financial crisis of 2007–2008, the Federal Deposit Insurance Corporation (FDIC) increased deposit insurance. What is the new maximum amount per account? |
| | A) | $50,000 |
| | B) | $100,000 |
| | C) | $250,000 |
| | D) | $1,000,000 |
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| 5 | |
Other things equal, a dramatic decrease in the money supply would: |
| | A) | increase the price level. |
| | B) | reduce the purchasing power of each dollar. |
| | C) | increase the purchasing power of each dollar. |
| | D) | have an ambiguous impact on the purchasing power of each dollar. |
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| 6 | |
Money is created when: |
| | A) | loans are repaid. |
| | B) | the net worth of the banking system is increased. |
| | C) | banks acquire physical capital. |
| | D) | banks make additional loans. |
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| 7 | |
Which of the following is not a routine function of the Federal Reserve Banks? |
| | A) | Issuing currency |
| | B) | Providing for check collection |
| | C) | Regulating the supply of money |
| | D) | Collecting tax revenue |
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| 8 | |
The group responsible for setting policy on buying and selling government securities (bills, notes, and bonds) is the: |
| | A) | Securities and Exchange Commission. |
| | B) | U.S. Treasury Board. |
| | C) | Federal Open Market Committee. |
| | D) | 12 Federal Reserve Bank presidents. |
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| 9 | |
Answer the next question on the basis of the following information: the required reserve ratio is 10 percent; the system initially has no excess reserves; $20 billion in new currency is deposited into the system. The $20 billion in new deposits will initially create excess reserves of: |
| | A) | $2 billion |
| | B) | $18 billion |
| | C) | $20 billion |
| | D) | $200 billion |
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| 10 | |
In the U.S. Federal Reserve System: |
| | A) | members of the Board of Governors also sit on the Federal Open Market Committee. |
| | B) | there is a Federal Reserve branch bank located in each state. |
| | C) | there are 14 regional Federal Reserve Banks. |
| | D) | the vice chair of the Board of Governors chairs the Federal Open Market Committee. |
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