ECN 1500 - Exam 2 NEWEST VERSION
WITH COMPLETE QUESTIONS AND
ACCURATE DETAILED ANSWERS
\VERIFIED 100% \UPDATED EXAM 2026
A sophisticated financial sector,
Is associated with high income nations
Funds in your checking account:
Is a medium of exchange
Which of the following is a typical bank asset?
Reserves.
Loans to customers.
If the reserve requirement is 100 percent, and banks keep no excess
reserves, a new deposit of $2,000 will add _________ to the money
supply:
2,000
,If the reserve requirement is 10 percent, and banks keep no excess
reserves, a new deposit of $2,000 will add _________ to the money
supply:
$20,000
Suppose total deposits in COVID Bank are $50,000 and required
reserves are $25,000. Based on this information, the required reserve
ratio is:
0.50
Assume COVID bank has a reserve requirement of 50 percent and no
excess reserves. If a new customer, Amy B., deposits $100 million, the
bank can make a maximum new loan of:
$50 million
A bank has a reserve requirement of 0.10. If it has demand deposits of
$100,000 and is holding $5,000 in reserves:
the bank is not meeting its reserve requirement
When a bank loans out excess reserves, the money supply:
increases
,If the reserves of the banking system are $2,000 billion, how much
money could these reserves support if the required reserve ratio is
0.25 and banks hold no excess reserves?
$8,000 billion
When money is held as an asset, it is serving as a:
store of value
M1 includes which of the following?
Checking account deposits
Which institutions can create money?
The Fed with an assist from banks
If the reserve ratio is 0.20, the money multiplier is:
5.0
Suppose total deposits in the First Bank of Commerce are $100,000
and required reserves are $10,000. Based on this information, the
required reserve ratio is
, From whence do Government Securities originate?
The U.S. Treasury as a result of budget deficits
If a Zions Bank needs reserves, it can
Borrow from the Fed at the discount rate
Borrow from Wells Fargo at the Federal Funds rate
Borrow from the Fed at the discount rate
Borrow from Wells Fargo at the Federal Funds rate
increases interest rates, reduce investment, decrease AD, and
decrease output/income
In the AS/AD model, expansionary monetary policy
increases both investment and aggregate demand
If the Federal Funds rate begins to rise above the current range
established by the Federal Reserve, the Fed would:
Conduct open market purchases
WITH COMPLETE QUESTIONS AND
ACCURATE DETAILED ANSWERS
\VERIFIED 100% \UPDATED EXAM 2026
A sophisticated financial sector,
Is associated with high income nations
Funds in your checking account:
Is a medium of exchange
Which of the following is a typical bank asset?
Reserves.
Loans to customers.
If the reserve requirement is 100 percent, and banks keep no excess
reserves, a new deposit of $2,000 will add _________ to the money
supply:
2,000
,If the reserve requirement is 10 percent, and banks keep no excess
reserves, a new deposit of $2,000 will add _________ to the money
supply:
$20,000
Suppose total deposits in COVID Bank are $50,000 and required
reserves are $25,000. Based on this information, the required reserve
ratio is:
0.50
Assume COVID bank has a reserve requirement of 50 percent and no
excess reserves. If a new customer, Amy B., deposits $100 million, the
bank can make a maximum new loan of:
$50 million
A bank has a reserve requirement of 0.10. If it has demand deposits of
$100,000 and is holding $5,000 in reserves:
the bank is not meeting its reserve requirement
When a bank loans out excess reserves, the money supply:
increases
,If the reserves of the banking system are $2,000 billion, how much
money could these reserves support if the required reserve ratio is
0.25 and banks hold no excess reserves?
$8,000 billion
When money is held as an asset, it is serving as a:
store of value
M1 includes which of the following?
Checking account deposits
Which institutions can create money?
The Fed with an assist from banks
If the reserve ratio is 0.20, the money multiplier is:
5.0
Suppose total deposits in the First Bank of Commerce are $100,000
and required reserves are $10,000. Based on this information, the
required reserve ratio is
, From whence do Government Securities originate?
The U.S. Treasury as a result of budget deficits
If a Zions Bank needs reserves, it can
Borrow from the Fed at the discount rate
Borrow from Wells Fargo at the Federal Funds rate
Borrow from the Fed at the discount rate
Borrow from Wells Fargo at the Federal Funds rate
increases interest rates, reduce investment, decrease AD, and
decrease output/income
In the AS/AD model, expansionary monetary policy
increases both investment and aggregate demand
If the Federal Funds rate begins to rise above the current range
established by the Federal Reserve, the Fed would:
Conduct open market purchases
