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devry eco312 week 6 quiz




Question;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) In the United States, the money supply (M1) is;comprised of (Points;1);coins, paper currency, and;checkable deposits.currency, checkable deposits;and Series E bonds.coins, paper currency;checkable deposits, and credit balances with brokers.paper currency, coins, gold;certificates, and time deposits.;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 vaultsRefer;to the above list. The M2 definition of;money comprises;(Points;1);items 2, 3, 4, 6, 7, 8, and 10.items 3, 4, 5, and 6.items 2, 3, 4, 6, 7, and 8.all of the items listed.;Question;4.4.(TCO;7) Assume Company X deposits $100,000 in cash in Commercial Bank A.;If no excess reserves exist at the time this deposit is made and the;reserve ratio is 20 percent, Bank A, by itself, can initially;increase the money supply by a maximum of (Points: 1);$50,000.$180,000.$80,000.$500,000.;Question;5.5.(TCO;7) The federal funds market is the market in which (Points: 1);banks borrow from the Federal;Reserve Banks.U.S. securities are bought and;sold.banks borrow reserves from one;another on an overnight basis.Federal Reserve Banks borrow;from one another.;Question;6.6.(TCO;7) When a bank loan is repaid, the supply of money (Points: 1);is constant, but its;composition will have increased.may either increase or;decrease.;Question;7.7.(TCO;7) The transactions demand for money is most closely related to money;functioning as a (Points;1);unit of account.medium of of value.measure of value.;Question;8.8.(TCO;7) It is costly to hold money because (Points: 1);deflation may reduce its;purchasing doing so, one sacrifices;interest prices are highly;variable.the rate at which money is;spent may decline.;Question;9.9.(TCO;7) Which of the following is not a tool of monetary;policy? (Points;1);Open market operationsChanges in banking lawsChanges in the amount of;reserves available at the term auction facilityChanges in the reserve ratio;Question;10.10.(TCO;7) The purpose of an expansionary monetary policy is to shift the (Points: 1);aggregate-demand curve;leftward.aggregate-demand curve;rightward.aggregate-supply curve;leftward.investment-demand curve;leftward.;Question 11.11.(TCO 7) What are the two;significant characteristics of the fractional reserve banking system? (Points: 5);Question 12.12.(TCO 7) Which tool of monetary;policy is most important? Why is this more important than the other;tools? (Points;5)


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