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Devry Eco312 quiz 6




Question;Quiz;Question 1.1.(TCO 7) If you write a;check on a bank to purchase a used Honda Civic, you are using money;primarily as (Points: 1);a medium of exchange.a store of value.a unit of economic investment.;Question 2.2.(TCO 7) Currency held in;the vault of First National Bank is (Points;1);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.;Question 3.3.(TCO 7) Answer the question on the basis of;the following list of assets;1. Large-denominated;($100,000 and more) time deposits2. Noncheckable;savings deposits3. Currency (coins and;paper money) in circulation4. Small-denominated;(less than $100,000) time deposits5. Stock certificates6. Checkable deposits7. Money market;deposit accounts8. Money market mutual;fund balances held by individuals9. Money market mutual;fund balances held by businesses10. Currency held in;bank vaults Refer;to the above list. The M1 definition of;money comprises item(s);(Points: 1);6 only.3, 4, and 6.3 and 6.3, 6, and 10.;Question 4.4.(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 (Points: 1);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 5.5.(TCO 7) A bank temporarily;short of required reserves may be able to remedy this situation by (Points: 1);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 6.6.(TCO 7) Money is destroyed;when (Points: 1);loans are made.checks written on one bank;are deposited in another are repaid.the net worth of the banking;system declines.;Question 7.7.(TCO 7) The asset demand;for money (Points: 1);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 8.8.(TCO 7) If the quantity of;money demanded exceeds the quantity supplied (Points: 1);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 9.9.(TCO 7) In the United;States, monetary policy is the responsibility of the (Points: 1);U.S. Treasury.Department of Commerce.Board of Governors of the;Federal Reserve System.U.S. Congress.;Question 10.10.(TCO 7) In the latter end;of 2001 the Fed cut the federal funds rate several times. The Fed's;purpose was to (Points: 1);prevent rising inflation.stop a banking crisis.stimulate economic growth.strengthen the international;value of the dollar.;Question 11.11.(TCO 7) What are the two significant;characteristics of the fractional reserve banking system? (Points: 5);Question 12.12.(TCO 7) Describe what changes in the Fed?s;major policy tools lead to [a] expansionary and [b] restrictive or;contractionary monetary policies. (Points;5)


Paper#55568 | Written in 18-Jul-2015

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