ECON 200 UOFA FINAL EXAM VERSION 1 COMPLETE QUESTIONS AND DETAILED SOLUTIONS LATEST UPDATE THIS YEAR JUST RELEASED

ECON 200 UOFA FINAL EXAM VERSION 1 -
COMPLETE QUESTIONS AND DETAILED SOLUTIONS

LATEST UPDATE THIS YEAR JUST RELEASED



Question 1: If traveler's checks were $1000 higher and saving
deposits were $500 higher, M1 would be a. $500 higher and M2
would be $1,500 higher. b. $1,000 higher and M2 would be $1,500
higher. c. M2 and M1 would be $1,500 higher. d. $1,000 high and M2
would be $500 higher.
Answer:
B


Question 2: John and Jane decide to go on a vacation. As a result,
they withdraw $2,500 from their savings account to purchase$2,500
worth of traveler's checks. As a result of these changes, a. M1
increases by $2,500 and M2 decreases by $2,500. b. M1 increases
by $2,500 and M2 stays the same. c. M1 and M2 stay the same. d.
M1 decreases by $2,500 and M2 increases by $2,500.
Answer:
B


Question 3: An open-market purchase a. increases the number of
dollars and the number of bonds in the hands of the public. b.
increases the number of dollars in the hands of the public and
decreases the number of bonds in the hands of the public. c.
decreases the number of dollars and the number of bonds in the
hands of the public. d. decreases the number of dollars in the
hands of the public and increases the number of bonds in the
hands of the public.
Answer:

,B


Question 4: An open-market sale a. increases the number of dollars
and the number of bonds in the hands of the public. b. increases
the number of dollars in the hands of the public and decreases the
number of bonds in the hands of the public. c. decreases the
number of dollars and the number of bonds in the hands of the
public. d. decreases the number of dollars in the hands of the
public and increases the number of bonds in the hands of the
public.
Answer:
D


Question 5: A bank's reserve ratio is 10 percent and the bank has
$5,000 in deposits. Its reserves amount to a. $50. b. $500. c. $4,500.
d. $4,950.
Answer:
B


Question 6: A bank's reserve ratio is 5 percent and the bank has
$2,280 in reserve. Its deposits amount to a. $114. b. $2,166. c.
$2,400. d. $45,600.
Answer:
D


Question 7: .35. If a bank that desires to hold no excess reserves
and has just enough reserves to meet the required reserve ratio
of15 percent receives a deposit of $600, it has a a. $600 increase in
excess reserves and no increase in required reserves. b. $600
increase in required reserves and no increase in excess reserves.

, c. $510 increase in excess reserves and a $90 increase in required
reserves. d. $90 increase in excess reserves and a $510 increase in
required reserves.36.
Answer:
C


Question 8: When the Fed buys government bonds a. the money
supply increases and the federal funds rate increases. b. the money
supply increases and the federal funds rate decreases. c. the
money supply decreases and the federal funds rate increases. d.
the money supply decreases and the federal funds rate decreases.
Answer:
C


Question 9: 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 a. buying bonds. This buying would reduce
reserves. b. buying bonds. This buying would increase reserves. c.
selling bonds. This selling would reduce reserves. d. selling bonds.
This selling would increase reserves.
Answer:
C


Question 10: 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 a. buying bonds. This buying would increase
the money supply. b. buying bonds. This buying would reduce the
money supply. c. selling bonds. This selling would increase the
money supply. d. selling bonds. This selling would reduce the
money supply.