Econ 14/15

Question 1

T/F the central bank of the United states is the federal reserve

Answer 1

True

Question 1

T/F US currency is a commodity-backed currency

Answer 1

False

Question 2

Under which circumstance would a bank pay less for a loan on the secondary market

Answer 2

The borrower is a firm that has recently declared bankruptcy

Question 3

The federal reserve is responsible for

Answer 3

Regulating banks

Question 4

T/F all bank reserves must be kept in vaults at the federal reserve

Answer 4

False

Question 5

In macro,_______ describes a situation in which two people each want to exchange good or services that the other can provide

Answer 5

a double coincidence of wants

Question 6

T/F the money supply has increased significantly over the past two years

Answer 6

true

Question 7

Which of the following would not be included in the M1 money supply

Answer 7

Savings deposits

Question 8

T/F a decrease in money supply typically results in decreased interest rates and increased consumer and buisness spending

Answer 8

Flase

Question 9

All of the following are ways in which a bank could increase its reserve requirement execpt for

Answer 9

Buying bonds from the fed

Question 10

T/F Banks can hold more in reserves than is required by law

Answer 10

True

Question 11

Which of the following tools is the fed res most likely to use in order to decrease the money supply

Answer 11

Increase intrest rates to slow aggregate demand

Question 12

T/F the money multiplier depends upon individuals and businesses re-depositing their loans in other banks

Answer 12

True

Question 13

The chairperson of the Fed res

Answer 13

controls the agenda of the federal open market committee

Question 14

T/F the Fed Res increases the amount of coins in currency in citculation in Dec and decreases the amount in Jan

Answer 14

True

Question 15

The main responsibility of a central bank is

Answer 15

Monetary but not fiscal policy

Question 16

Which is an example of banking regulation

Answer 16

Banks must maintain a certain level of cash reserves

Question 17

What will be the impact of the Fed Res selling us treasuries to banks

Answer 17

Decrease aggregate demand

Question 18

If the economy is in recession with high unemployment and output below potential GDP which strategy is the FEd most likely to utilize to increase GDP

Answer 18

Expansionary monetary policy

Question 19

T/F the fed Res stands ready to lend to banks when funds cannot be obtained from other sources

Answer 19

True

Question 20

Who supervises credit unions

Answer 20

The national credit union administration