Money solves the problem of double coincidence of wants that would regularly occur under a system of A.credit cards B. Debit cards C. Money or…

1.Money solves the problem of double coincidence of wants that would regularly occur under a system of A.credit cards B. Debit cards C. Money or D.Barter

2. Credit Cards. Credit cards are not considered part of the money supply​ because:

A.

they are a unit of account.

B.

they represent a store of value.

C.

they are a loan which you have to use money to pay for later.

D.

they make it easier to conduct business.

3. Currency and Underground Economy. People that engage in illegal transactions prefer to use currency relative to other forms of money. Which of the following is not a reason illegal transactions are usually made in​ currency?

A.

Currency can be used to make other transactions.

B.

It is not easy to track transactions made with currency.

C.

People know the value of currency.

D.

It is easy to track transactions made with currency.

4. If the reserve ratio is

0.20

and a deposit of

​$200

is placed into a​ bank, that bank can lend out

​$nothing

.

​5. Money Market Mutual​ Funds, Banks, and Reserves. Money market mutual funds typically invest in government securities and other financial instruments that can be easily bought and sold. They are not subject to reserve requirements​ and, in​ fact, hold minimal reserves.​ Banks, on the other​ hand, make loans to businesses for investment purposes.

Prior to​ 2008, banks did not normally earn interest on reserves.

Suppose that banks still do not earn any interest on reserves. If there were no reserve requirements for​ banks, how do you think their reserve holdings would compare to money market mutual​ funds?

A.

The level of bank reserve holdings would be similar to those held by money market mutual funds since banks can earn more money by keeping reserves at minimal levels.

B.

The level of bank reserve holdings would be lower than those held by money market mutual funds since banks can borrow from each other.

C.

The level of bank reserve holdings would still be higher than those held by money market mutual funds since banks have to provide funds to depositors.

D.

The level of bank reserve holdings would be higher than those held by money market mutual funds since bank lending is riskier than investments of money market mutual funds.

6. If a bank has

$ 50

billion in demand deposits and required reserves are

8

​%,

the maximum amount of money it can lend is

​$nothing

billion.

7. The Treasury Secretary and the Fed. ​Occasionally, some economists or politicians suggest that the Secretary of the Treasury become a member of the Federal Open Market Committee. This would most likely

increase

decrease

have no impact on

the independence of the Federal Reserve.

8. Where Should Regional Banks Be Located​ Today? Given the changes in the location of economic activity that have occurred since the founding of the Federal​ Reserve, how would the location of the regional banks change if they were allocated by economic​ activity?

The locations of the banks and the branches would be

the same

different

since economic activity has geographically shifted. There would probably be more banks in the

West

East

​,

and the

Philadelphia

Cleveland

San Francisco

district would be​ smaller, or have more banks.

9. Which of the following is NOT a function of the Federal​ Reserve?

A.

conducting monetary policy

B.

lending money to individuals who can not receive loans from anyone else

C.

ensuring check clearing

D.

distributing new currency for the U.S. Treasury​ Department, which prints it

10. In the banking​ system, when clearing​ checks, the difference between the Federal​ Reserve’s credits and debits is​ the:

A.

liability.

B.

money.

C.

reserve.

D.

float.





ORDER YOUR ORIGINAL PAPER

Request for a custom paper or place a new order

Assignment Solutions For You


THE BEST CUSTOM ESSAY WRITING SERVICE AT YOUR FINGERTIPS

Forget All Your Assignment & Essay Related Worries By Simply Filling Order Form