ECON 3303 Money and Banking Exam 4
Questions With Correct Answers
The formula for the simple deposit multiplier can be expressed as -
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CORRECT ANSWER✔✔-D) D = 1/rr x R
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When the federal reserve calls in a discount loan from a bank, the
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monetary base _________ and reserves ____________. - CORRECT
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ANSWER✔✔-C) decreases; decrease | |
The case for Federal Reserve independence does not include the idea
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that - CORRECT ANSWER✔✔-C) policy is always performed better by an
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elite group such as the Fed.
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When the Federal Reserve sells a government bond to a bank, reserves
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in the banking system ____________ and the monetary base
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_____________, everything else held constant. - CORRECT | | | | | | |
ANSWER✔✔-D) decrease; decreases | |
The excess reserves ratio is _________ related to expected deposit
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outlfows, and is _____________ related to the market interest rate. -
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CORRECT ANSWER✔✔-B) positively; negatively
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, If a bank has excess reserves of $5,000 and demand deposit liabilities of
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$80,000, and if the reserve requirement is 20 percent, then the bank
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has actual reserves of - CORRECT ANSWER✔✔-C) $21,000
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Goal independence is the ability of ___________ to set monetary
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policy___________. - CORRECT ANSWER✔✔-C) the central bank; | | | | | | |
instruments
The amount of borrowed reserves is _________________ related to the
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discount rate, and is _________ related to the market interest rate. -
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CORRECT ANSWER✔✔-D) negatively; positively
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If Treasury deposits at the Fed are predicted to fall, the manager of the
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trading desk at the New York Fed bank will likely conduct ___________
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open market operations to _______________ reserves. - CORRECT
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ANSWER✔✔-A) defensive; drain | |
The effect of an open market purchase on reserves differs depending on
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how the seller of the bonds keeps the proceeds. If the proceeds are
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kept in ___________, the open market purchase has no effect on
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reserves; if the proceeds are kept as ___________, reserves increase by
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the amount of the open market purchase. - CORRECT ANSWER✔✔-B)
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currency; deposits |
Questions With Correct Answers
The formula for the simple deposit multiplier can be expressed as -
| | | | | | | | | | | |
CORRECT ANSWER✔✔-D) D = 1/rr x R
| | | | | |
When the federal reserve calls in a discount loan from a bank, the
| | | | | | | | | | | | |
monetary base _________ and reserves ____________. - CORRECT
| | | | | | | |
ANSWER✔✔-C) decreases; decrease | |
The case for Federal Reserve independence does not include the idea
| | | | | | | | | | |
that - CORRECT ANSWER✔✔-C) policy is always performed better by an
| | | | | | | | | | |
elite group such as the Fed.
| | | | |
When the Federal Reserve sells a government bond to a bank, reserves
| | | | | | | | | | | |
in the banking system ____________ and the monetary base
| | | | | | | | |
_____________, everything else held constant. - CORRECT | | | | | | |
ANSWER✔✔-D) decrease; decreases | |
The excess reserves ratio is _________ related to expected deposit
| | | | | | | | | |
outlfows, and is _____________ related to the market interest rate. -
| | | | | | | | | | |
CORRECT ANSWER✔✔-B) positively; negatively
| | |
, If a bank has excess reserves of $5,000 and demand deposit liabilities of
| | | | | | | | | | | | |
$80,000, and if the reserve requirement is 20 percent, then the bank
| | | | | | | | | | | |
has actual reserves of - CORRECT ANSWER✔✔-C) $21,000
| | | | | | |
Goal independence is the ability of ___________ to set monetary
| | | | | | | | | |
policy___________. - CORRECT ANSWER✔✔-C) the central bank; | | | | | | |
instruments
The amount of borrowed reserves is _________________ related to the
| | | | | | | | |
discount rate, and is _________ related to the market interest rate. -
| | | | | | | | | | | | |
CORRECT ANSWER✔✔-D) negatively; positively
| | |
If Treasury deposits at the Fed are predicted to fall, the manager of the
| | | | | | | | | | | | | |
trading desk at the New York Fed bank will likely conduct ___________
| | | | | | | | | | | |
open market operations to _______________ reserves. - CORRECT
| | | | | | | |
ANSWER✔✔-A) defensive; drain | |
The effect of an open market purchase on reserves differs depending on
| | | | | | | | | | |
how the seller of the bonds keeps the proceeds. If the proceeds are
| | | | | | | | | | | | | |
kept in ___________, the open market purchase has no effect on
| | | | | | | | | | |
reserves; if the proceeds are kept as ___________, reserves increase by
| | | | | | | | | | |
the amount of the open market purchase. - CORRECT ANSWER✔✔-B)
| | | | | | | | | |
currency; deposits |
