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Questions and Answers
What happens to the money supply if Tamika pays off a loan at the bank, ceteris paribus?
What happens to the money supply if Tamika pays off a loan at the bank, ceteris paribus?
- The money supply becomes more volatile
- The money supply stays the same
- The money supply becomes smaller (correct)
- The money supply becomes larger
Which of the following is NOT a reason why a transactions account is considered inconvenient for most people?
Which of the following is NOT a reason why a transactions account is considered inconvenient for most people?
- A trip to the bank is required
- Limited accessibility to funds
- Potential security concerns
- Risk of losing physical cash (correct)
What is the function of money when you use it to compare two houses in different price ranges?
What is the function of money when you use it to compare two houses in different price ranges?
- Medium of exchange
- Standard of value (correct)
- Store of value
- Unit of account
If a bank has $1,000,000 in deposits, a minimum reserve requirement of 15 percent, and bank reserves of $170,000, how much can the bank make in new loans?
If a bank has $1,000,000 in deposits, a minimum reserve requirement of 15 percent, and bank reserves of $170,000, how much can the bank make in new loans?
In which scenario is money functioning as a medium of exchange?
In which scenario is money functioning as a medium of exchange?
According to the monetarist view, what is the nature of the aggregate supply curve at the natural rate of unemployment?
According to the monetarist view, what is the nature of the aggregate supply curve at the natural rate of unemployment?
What happens to the money supply when the Fed buys bonds through open-market operations?
What happens to the money supply when the Fed buys bonds through open-market operations?
If the Fed announces that it is raising the federal funds rate, what does this signal its intention to do in the open market?
If the Fed announces that it is raising the federal funds rate, what does this signal its intention to do in the open market?
What is the key decision-making body for general Federal Reserve policy?
What is the key decision-making body for general Federal Reserve policy?
If the Fed wants to increase the money supply, what action can it take?
If the Fed wants to increase the money supply, what action can it take?
How many members are there in the Board of Governors of the Federal Reserve and how long are they appointed for?
How many members are there in the Board of Governors of the Federal Reserve and how long are they appointed for?
During periods of high unemployment and low output, what do Keynesian economists advocate?
During periods of high unemployment and low output, what do Keynesian economists advocate?
What happens when government purchases are decreased?
What happens when government purchases are decreased?
What is the principal mechanism for directly changing the reserves of the banking system?
What is the principal mechanism for directly changing the reserves of the banking system?
What is the purpose of the discount window for banks?
What is the purpose of the discount window for banks?
What does it mean when money serves as a medium of exchange?
What does it mean when money serves as a medium of exchange?
How does an increase in government spending affect total aggregate spending when the marginal propensity to save is 0.1?
How does an increase in government spending affect total aggregate spending when the marginal propensity to save is 0.1?
What happens to deposit creation possibilities with a larger minimum reserve requirement?
What happens to deposit creation possibilities with a larger minimum reserve requirement?
What is the impact on the money supply when the Fed buys bonds through open-market operations?
What is the impact on the money supply when the Fed buys bonds through open-market operations?
In the context of economics, what does a rising federal funds rate signal regarding the Fed's actions in the open market?
In the context of economics, what does a rising federal funds rate signal regarding the Fed's actions in the open market?
What is the role of the 12 regional Federal Reserve banks?
What is the role of the 12 regional Federal Reserve banks?
How many members are there in the Board of Governors of the Federal Reserve, and how long are they appointed for?
How many members are there in the Board of Governors of the Federal Reserve, and how long are they appointed for?
In macroeconomics, what happens to nominal income if prices rise while the amount received annually remains constant?
In macroeconomics, what happens to nominal income if prices rise while the amount received annually remains constant?
According to Keynesian economists, what is their view on government intervention during periods of high unemployment and low output?
According to Keynesian economists, what is their view on government intervention during periods of high unemployment and low output?
What happens to a bank's excess reserves if it decreases its loans?
What happens to a bank's excess reserves if it decreases its loans?
Why is money considered a store of value?
Why is money considered a store of value?
What is the primary purpose of Federal Reserve open-market operations?
What is the primary purpose of Federal Reserve open-market operations?
What characterizes the aggregate supply curve at the natural rate of unemployment according to the monetarist view?
What characterizes the aggregate supply curve at the natural rate of unemployment according to the monetarist view?
In terms of structure, how long is the typical term served by a member of the Federal Reserve Board of Governors?
In terms of structure, how long is the typical term served by a member of the Federal Reserve Board of Governors?
If a bank has insufficient reserves to meet its requirements, what is a possible action it can take?
If a bank has insufficient reserves to meet its requirements, what is a possible action it can take?
What happens to bank reserves when Tamika pays off a loan at the bank, ceteris paribus?
What happens to bank reserves when Tamika pays off a loan at the bank, ceteris paribus?
Which of the following is not a characteristic of money as a store of value?
Which of the following is not a characteristic of money as a store of value?
What happens to interest rates when the Fed sells bonds in the open market?
What happens to interest rates when the Fed sells bonds in the open market?
According to the monetarist view, what is the nature of the aggregate supply curve during the natural rate of unemployment?
According to the monetarist view, what is the nature of the aggregate supply curve during the natural rate of unemployment?
What is the role of the Federal Reserve Board of Governors in relation to the Federal Reserve System?
What is the role of the Federal Reserve Board of Governors in relation to the Federal Reserve System?
When the Fed sells bonds in the open market, what is the impact on aggregate demand?
When the Fed sells bonds in the open market, what is the impact on aggregate demand?
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