Question 1

If the federal funds rate were below the level the Federal Reserve had targeted, the Fed could move the rate back towards its target by

Accepted Answer

A)  buying bonds.This buying would reduce the money supply.
B)  buying bonds.This buying would increase the money supply.
C)  selling bonds.This selling would reduce the money supply.
D)  selling bonds.This selling would increase the money supply.E) A) and D)
F) B) and C)

Question 2

Hideo and Hannah decide to go on a vacation. As a result, they withdraw $5,000 from their savings account to purchase $5,000 worth of traveler's checks. As a result of these changes,

Accepted Answer

A)  M1 increases by $5,000 and M2 decreases by $5,000.
B)  M1 increases by $5,000 and M2 stays the same.
C)  M1 and M2 stay the same.
D)  M1 decreases by $5,000 and M2 increases by $5,000.E) All of the above
F) C) and D)

Question 3

What are the functions of money?

Accepted Answer

Medium of exchange, ...

Question 4

Money allows people to specialize in what they do best, thereby raising everyone's standard of living.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not included in either M1 or M2?

Accepted Answer

A)  U.S.Treasury bills
B)  Small time deposits
C)  Demand deposits
D)  Money market mutual fundsE) B) and C)
F) B) and D)

Question 6

You pay for cheese and bread from the deli with currency. Which function of money does this best illustrate?

Accepted Answer

A)  Medium of exchange
B)  Unit of account
C)  Store of value
D)  LiquidityE) A) and D)
F) A) and B)

Question 7

Other things the same, if reserve requirements are decreased, the reserve ratio

Accepted Answer

A)  increases, the money multiplier increases, and the money supply increases.
B)  decreases, the money multiplier increases, and the money supply increases.
C)  increases, the money multiplier decreases, and the money supply decreases.
D)  decreases, the money multiplier decreases, and the money supply increases.E) A) and B)
F) A) and C)

Question 8

The money multiplier is _____ when the reserve ratio is 12.5 percent.

Accepted Answer

The answer of The money multiplier is _____ when the...

Question 9

Which of the following best represents fiat money?

Accepted Answer

A)  The euro
B)  A gold bar
C)  Monopoly money
D)  Baseball cardsE) A) and B)
F) A) and C)

Question 10

What does the "double coincidence of wants" refer to?

Accepted Answer

"Double coincidence of wants" refers to ...

Exam 29: The Monetary System

If the federal funds rate were below the level the Federal Reserve had targeted, the Fed could move the rate back towards its target by

Correct Answer
verified

What does the "double coincidence of wants" refer to?

Correct Answer
verified
"Double coincidence of wants" refers to ...
View Answer

The money multiplier is _____ when the reserve ratio is 12.5 percent.

Correct Answer
verified

You pay for cheese and bread from the deli with currency. Which function of money does this best illustrate?

Correct Answer
verified

Money allows people to specialize in what they do best, thereby raising everyone's standard of living.

Correct Answer
verified

Which of the following is not included in either M1 or M2?

Correct Answer
verified

Hideo and Hannah decide to go on a vacation. As a result, they withdraw $5,000 from their savings account to purchase $5,000 worth of traveler's checks. As a result of these changes,

Correct Answer
verified

Which of the following best represents fiat money?

Correct Answer
verified

Other things the same, if reserve requirements are decreased, the reserve ratio

Correct Answer
verified

What are the functions of money?

Correct Answer
verified
Medium of exchange, ...
View Answer

Exam 29: The Monetary System

If the federal funds rate were below the level the Federal Reserve had targeted, the Fed could move the rate back towards its target by

Correct AnswerverifiedShow Answer

What does the "double coincidence of wants" refer to?

Correct Answerverified"Double coincidence of wants" refers to ...View AnswerShow Answer

The money multiplier is _____ when the reserve ratio is 12.5 percent.

Correct AnswerverifiedShow Answer

You pay for cheese and bread from the deli with currency. Which function of money does this best illustrate?

Correct AnswerverifiedShow Answer

Money allows people to specialize in what they do best, thereby raising everyone's standard of living.

Correct AnswerverifiedShow Answer

Which of the following is not included in either M1 or M2?

Correct AnswerverifiedShow Answer

Hideo and Hannah decide to go on a vacation. As a result, they withdraw $5,000 from their savings account to purchase $5,000 worth of traveler's checks. As a result of these changes,

Correct AnswerverifiedShow Answer

Which of the following best represents fiat money?

Correct AnswerverifiedShow Answer

Other things the same, if reserve requirements are decreased, the reserve ratio

Correct AnswerverifiedShow Answer

What are the functions of money?

Correct AnswerverifiedMedium of exchange, ...View AnswerShow Answer

Correct Answer
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Correct Answer
verified
"Double coincidence of wants" refers to ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Medium of exchange, ...
View Answer