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Monetary policy is determined by a committee whose voting members include all the presidents of the regional Federal Reserve Banks.

A) True
B) False

Correct Answer

verifed

verified

Assume that when $100 of new reserves enter the banking system,the money supply ultimately increases by $800.Assume also that no banks hold excess reserves and that the entire money supply consists of bank deposits.If,at a point in time,reserves for all banks amount to $750,then at that same point in time,loans for all banks amount to $6,000.

A) True
B) False

Correct Answer

verifed

verified

False

Roundabout trade decreases production.

A) True
B) False

Correct Answer

verifed

verified

As banks create money,they create wealth.

A) True
B) False

Correct Answer

verifed

verified

False

The chair of the Board of Governors regularly testifies to Congress about Fed policy.

A) True
B) False

Correct Answer

verifed

verified

Bank runs are only a concern under a fractional-reserve banking system.

A) True
B) False

Correct Answer

verifed

verified

A debit card is more similar to a credit card than to a check.

A) True
B) False

Correct Answer

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verified

The series of bank failures in 1907 occurred despite the creation of the Federal Reserve many years earlier.

A) True
B) False

Correct Answer

verifed

verified

Banks cannot influence the money supply if they are required to hold all deposits in reserve.

A) True
B) False

Correct Answer

verifed

verified

Sam wants to trade eggs for sausage.Sally wants to trade sausage for eggs.Sam and Sally have a double-coincidence of wants.

A) True
B) False

Correct Answer

verifed

verified

In the months of November and December,people in the United States hold a larger part of their money in the form of currency because they intend to shop and travel for the holidays.As a result,other things the same,the money supply increases.

A) True
B) False

Correct Answer

verifed

verified

If banks hold any amount of their deposits in reserve,then they do not have the ability to influence the money supply.

A) True
B) False

Correct Answer

verifed

verified

In a system of 100-percent-reserve banking,changes in the money supply depend on the decisions of the Fed as well as the behavior of depositors and bankers.

A) True
B) False

Correct Answer

verifed

verified

Marc puts prices on surfboards and skateboards at his sporting goods store.He is using money as a unit of account.

A) True
B) False

Correct Answer

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verified

Credit cards are a medium of exchange.

A) True
B) False

Correct Answer

verifed

verified

The Federal Reserve is a privately operated commercial bank.

A) True
B) False

Correct Answer

verifed

verified

The use of money allows trade to be roundabout.

A) True
B) False

Correct Answer

verifed

verified

Banks can hold deposits at the Federal Reserve.Balances in these accounts can be used by banks to meet their reserve requirements,but the Fed pays no interest on these deposits.

A) True
B) False

Correct Answer

verifed

verified

Assume that when $100 of new reserves enter the banking system,the money supply ultimately increases by $625.Assume also that no banks hold excess reserves and that the entire money supply consists of bank deposits.If,at a point in time,reserves for all banks amount to $500,then at that same point in time,loans for all banks amount to $2,625.

A) True
B) False

Correct Answer

verifed

verified

Other things the same,if banks decide to hold a smaller part of their deposits as excess reserves,the money supply will fall.

A) True
B) False

Correct Answer

verifed

verified

False

Showing 1 - 20 of 57

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