31.The U.S. money supply measure that consists of currency plus travelers checks and checkable deposits is referred to as a.M1. b.M2. c.M3. d.M1 + M2.
31.The U.S. money supply measure that consists of currency plus travelers checks and checkable deposits is referred to as
a.M1.
b.M2.
c.M3.
d.M1 + M2.
32.The bulk of the M1 money supply is made up of
a.silver dollars and gold bars.
b.checkable deposits.
c.currency and travelers checks.
d.money market funds.
33.The amount of money a bank can lend
a.depends on its gold holdings.
b.depends on its holdings of government bonds.
c.is inversely related to its
d.is unrestricted.
34.If a bank has $60,000 in legal reserves and is subject to a 10 percent reserve requirement, it could have outstanding checkable deposits to the extent of
a.$60 million.
b.$600,000.
c.$6 million.
d.$60,000.
35.Excess reserves are the amount of money a bank
b.is required to hold against its checkable deposits and savings accounts.
c.has in excess of its
d.usually holds to be ready to meet unexpected withdrawals.
36.If a bank has legal reserves of $1 million, a reserve requirement of 10 percent, and checkable deposits of $6 million, it can extend its checkable deposits by
a.$1 million.
b.$2 million.
c.$4 million.
d.$10 million.
37.If a $1,000 cash deposit is made in a bank where the reserve requirement is 10 percent, then the maximum total loans in the form of checkable deposits that may be made as a result of that cash deposit is
a.$1,000.
b.$5,000.
c.$9,000.
d.$10,000.
38.The higher the reserve requirements, the
a.greater the possible expansion of the money supply.
b.less the possible expansion of the money supply.
c.more loans a bank can extend.
d.higher the interest a bank must pay on its checkable deposits.
39.The higher the reserve requirement,
a.the more the money supply can expand.
b.the more interest the bank will earn on its reserve account.
c.the less the money supply can expand.
d.both the more the money supply can expand and the more interest the bank will earn on its reserve account.
40.A bank can actually create money by
a.lending its required reserves.
b.ordering newly printed money from the Fed.
c.lending its excess reserves.
d.None of these.
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