Professional Documents
Culture Documents
5. Fred Jones won a lottery prize of $1 million. He put the money in the bank to save it for his
daughter’s college education. For him, money was functioning primarily as a
a. unit of account.
b. store of value.
c. means of payment.
d. type of short-term loan.
7. Given the following information, what would be the values of M1 and M2?
Small time deposits $650 billion
Checking deposits $300 billion
Savings-type deposits $750 billion
Money market mutual funds $600 billion
Travelers’ checks $ 25 billion
Large time deposits $600 billion
Cash in hand $100 billion
a. M1 = $400 billion, M2 = $2,450 billion.
171
Chapter The Monetary System
10. Which of the following would not be used by the Fed to influence interest rates?
a. selling securities
b. buying stocks
c. setting reserve requirements
d. changing the discount rate
11. The interest rate that the Fed charges banks that borrow reserves from it is the
a. federal funds rate.
b. discount rate.
c. reserve requirement.
d. prime rate.
13. The most effective and frequently used tool the Fed has at its disposal to change the economy’s
money supply is
a. open market operations.
b. the discount rate.
c. the reserve requirement.
d. the federal funds rate.
17. Given an initial deposit of $5,000 and a legal reserve requirement of 25%, the amount of money
potentially created by the banking system is
a. $15,000.
b. $20,000. Phải trừ đi 5000 tiền gửi thì sẽ ra số tiền tiềm năng đc tạo ra
c. $25,000.
d. $10,000.
18. When the potential money multiplier is 7, a $3,000 increase in demand deposits could support the
creation of additional new demand deposits.
a. $3,000
b. $9,000
c. $15,000
d. $18,000
19. If a bank receives a new demand deposit of $10,000, and the legal reserve requirement is 20 percent,
then the bank can lend out
a. $2,000.
b. $10,000.
c. $40,000.
d. $8,000.
21. Given the information in the table, if the legal reserve requirement is 20 percent, this bank has
excess reserves of
a. $80,000.
b. $60,000.
c. $40,000.
d. $20,000.
Assets Liabilities
Reserves $80,000 Demand deposits $100,000
Loans $20,000
22. Given the information in the table, if the legal reserve requirement is 20 percent, this bank can
expand its loans by as much as
a. $80,000.
b. $60,000. Trừ đi 20,000 đã cho Loan trước đó r thì expand đc nhiều nhất là 60,000
c. $40,000.
d. $20,000.
Chapter The Monetary System
23. If a bank keeps some of its excess reserves, the actual money multiplier
a. increases.
b. stays the same.
c. goes to zero.
d. decreases.
24. If the Fed reduces the money supply, banks will often initially have
a. more reserves than they are required to hold.
b. excess reserves.
c. increases demand deposits.
d. deficient reserves.
25. If the Fed decides to sell $10 million in securities and the Paris National Bank writes out a $10
million check to purchase these securities, then the
a. Paris National Bank now has $10 million more of excess reserves at the Fed.
b. Paris National Bank now has $10 million fewer reserves at the Fed.
c. Fed has increased its asset position by $20 million.
d. money supply has increased.
26. When the Fed decreases the discount rates, it makes it easier for banks to
a. decrease their reserves by borrowing from the Fed, causing the money supply to shrink.
b. increase their reserves by borrowing from the Fed, causing the money supply to grow.
c. protect against the inevitable accompanying increase in the legal reserve requirement.
d. convert its loans into deposits.
27. The Fed loses some control over the interest rate once it targets the money supply,
a. but the interest rate does not move in an inappropriate direction with respect to the Fed’s
monetary policy.
b. and the interest rate often moves in the opposite direction of the Fed’s target.
c. but it can still dictate what the interest rate will be.
d. and also loses some control over open market operations, which are linked to the interest rate.