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DEVRY ECO312 WEEK 6 WEEKLY ASSIGNMENT

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Question;(TCO 7) If you write a check on a bank to purchase a used;Honda Civic, you are using money primarily as;a medium of exchange.;a store of value.;a unit of account.;an economic investment.;Question 2. Question;(TCO 7) Currency held in the vault of First National Bank is;counted as part of M1.;counted as part of M2, but not M1.;only counted as part of M1 if it was deposited;into a checking account.;not counted as part of the money supply.;Instructor Explanation: Chapter 31;Points Received: 1 of 1;Comments;Question 3. Question;(TCO 7) Answer the question on the basis of the following;list of assets;1. Large-denominated ($100,000 and more) time deposits;2. Noncheckable savings deposits;3. Currency (coins and paper money) in circulation;4. Small-denominated (less than $100,000) time deposits;5. Stock certificates;6. Checkable deposits;7. Money market deposit accounts;8. Money market mutual fund balances held by individuals;9. Money market mutual fund balances held by businesses;10. Currency held in bank vaults;Refer to the above;list. The M1 definition of money;comprises item(s);6 only.;3, 4, and 6.;3 and 6.;3, 6, and 10.;Question 4. Question;(TCO 7) Assume the Standard Internet Company negotiates a;loan for $5,000 from the Metro National Bank and receives a checkable deposit;for that amount in exchange for its promissory note (IOU). As a result of this transaction;the supply of money is increased by $5,000.;the supply of money declines by the amount of;the loan.;a claim has been "demonetized.;the Metro Bank acquires reserves from other;banks.;Question 5. Question;(TCO 7) A bank temporarily short of required reserves may be;able to remedy this situation by;borrowing funds in the federal funds market.;granting new loans.;shifting some of its vault cash to its reserve;account at the Federal Reserve.;buying bonds from the public.;Question 6. Question;(TCO 7) Money is destroyed when;loans are made.;checks written on one bank are deposited in;another bank.;loans are repaid.;the net worth of the banking system declines.;Question 7. Question;(TCO 7) The asset demand for money;is unrelated to both the interest rate and the;level of GDP.;varies inversely with the rate of interest.;varies inversely with the level of real GDP.;varies directly with the level of nominal GDP.;Question 8. Question;(TCO 7) If the quantity of money demanded exceeds the;quantity supplied;the supply-of-money curve will shift to the;left.;the demand-for-money curve will shift to the;right.;the interest rate will rise.;the interest rate will fall.;Question 9. Question;(TCO 7) In the United States, monetary policy is the;responsibility of the;U.S. Treasury.;Department of Commerce.;Board of Governors of the Federal Reserve;System.;U.S. Congress.;Question 10. Question;(TCO 7) In the latter end of 2001 the Fed cut the federal;funds rate several times. The Fed's;purpose was to;prevent rising inflation.;stop a banking crisis.;stimulate economic growth.;strengthen the international value of the;dollar.;Question 11. Question;(TCO 7) What are the two significant characteristics of the;fractional reserve banking system?;Question 12. Question;(TCO 7) Describe what changes in the Fed?s major policy;tools lead to [a] expansionary and [b] restrictive or contractionary monetary;policies.

 

Paper#55510 | Written in 18-Jul-2015

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