BSA41 2nd Sem.

2019 - 2020 Macroeconomics ECON203

T/F Money Supply

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Question 1
If the Central Bank buys securities on the open market, it will increase the money supply.

Response: True

Question 2
In an economy that uses fiat money, there is no need for double coincidence of wants.

Response: True

Question 3
Excess reserves in a bank are the difference between required reserves and the bank's total net worth.

Response: False

Question 4
Among the liabilities of commercial banks are deposits.

Response: True

Question 5
Only the required reserve ratio determines how much money the Central Bank can create.

Response: False

Question 6
Among the assets of commercial banks are demand deposits.

Response: False

Question 7
Money is anything that generally is accepted as a medium of exchange.

Response: True

Question 8
The tool most frequently used by the Fed to change the money supply is changing the required reserve ratio.

Response: False

Question 9
Fiat money is money the government says is money.

Response: True

Question 10
The M1 definition of money includes money market accounts.

Response: False

Question 11
Nestor Espenilla is the current governor of the Bangko Sentral ng Pilipinas.
Response: True

Question 12
A sale of government securities to the public by the Central Bank will increase the money supply.

Response: False

Question 13
If all banks are loaned up and so will not make further loans, a $1,000 deposit creates $1,000 in new money.

Response: False

Question 14
A decrease in the required reserve ratio increases the money supply.

Response: True

Question 15
When you use money to fill your car with gas every week, you are using money as a unit of account.

Response: False