Money and Banking Overview

<p>The monetary multiplier will be lower. (D)</p> Signup and view all the answers

<p>Loan repayment decreases the money supply. (E)</p> Signup and view all the answers

<p>To evaluate the financial health of banks and prevent further bank failures. (C)</p> Signup and view all the answers

<p>$241.24$ (E)</p> Signup and view all the answers

<p>They are inversely proportional. (C)</p> Signup and view all the answers

<p>Bank panics caused banks to close and lose their customers' deposits. (B)</p> Signup and view all the answers

<p>The money supply would decrease. (A)</p> Signup and view all the answers

<p>Double Coincidence of Wants (D)</p> Signup and view all the answers

<p>Credit Creation (D)</p> Signup and view all the answers

<p>It is widely accepted by the public. (C)</p> Signup and view all the answers

<p>Savings Deposits (C)</p> Signup and view all the answers

<p>Liquidity (B)</p> Signup and view all the answers

<p>Issue currency and control the money supply (C)</p> Signup and view all the answers

<p>It diminishes the confidence in the currency's value (B)</p> Signup and view all the answers

<p>Credit unions (B)</p> Signup and view all the answers

<p>Implementing monetary policies (A)</p> Signup and view all the answers

<p>By pooling deposits to purchase stocks or bonds (C)</p> Signup and view all the answers

<p>They typically focus on savings and loans (C)</p> Signup and view all the answers

<p>Providing personal banking services to customers (C)</p> Signup and view all the answers

<p>Investment banks (A)</p> Signup and view all the answers

<p>Credit/debit cards (A)</p> Signup and view all the answers

<p>By controlling government spending and taxation (A)</p> Signup and view all the answers

<p>Issuing shares of stock (B)</p> Signup and view all the answers

<p>Actual reserves can be greater than, less than, or equal to required reserves. (A)</p> Signup and view all the answers

<p>By lending out excess reserves (B)</p> Signup and view all the answers

<p>Printing currency (B)</p> Signup and view all the answers

<p>The percentage of a bank's liabilities that must be held in the form of reserves (C)</p> Signup and view all the answers

<p>Reserves that are held above the required level (C)</p> Signup and view all the answers

<p>It decreases both reserves and checkable deposits (A)</p> Signup and view all the answers

<p>The bank's pre-loan excess reserves (B)</p> Signup and view all the answers

<p>Reserves increase and securities increase (C)</p> Signup and view all the answers

<p>To increase the supply of money in the economy (B)</p> Signup and view all the answers

<p>Profitability and liquidity (D)</p> Signup and view all the answers

<p>They want to increase their liquidity and reduce their risk exposure (D)</p> Signup and view all the answers

<p>Actual reserves are what banks choose to hold, while required reserves are what the government mandates (B)</p> Signup and view all the answers

<p>To introduce the concept of lending and money creation (B)</p> Signup and view all the answers

<p>Banks rely on depositors' confidence, which can easily be shaken (D)</p> Signup and view all the answers

<p>It increases assets and liabilities (A)</p> Signup and view all the answers

<p>Banks create new money through fractional-reserve banking (C)</p> Signup and view all the answers

Money serves as a medium of exchange, unit of account, and store of value.

M1 includes currency and checkable deposits at commercial banks and other institutions.

M2 includes M1 plus near-monies like savings accounts and money market accounts.

Fiat money has a face value greater than its intrinsic value and relies on trust.

The value of money comes from acceptability, legal tender status, and relative scarcity.

The interest rate at which banks lend to each other overnight.

When banks can create money by lending out deposits, increasing the money supply.

The percentage of deposits that banks must hold and not lend out.

Funds that banks can lend out beyond the required reserves.

The factor by which a change in reserves leads to a change in the money supply.

The process of paying back loans, which reduces the amount of money in circulation.

A period of mass bank failures causing major withdrawals and economic decline.

A government-mandated closure of banks to assess their solvency.

Kuala Lumpur Interbank Offered Rate, a benchmark interest rate for Malaysian banks.

A severe worldwide economic downturn that began in 1929, impacting banks and consumers.

The government’s ability to keep money's value stable affects purchasing power.

When inflation becomes extremely high, rendering money unacceptable.

Intelligent management of the money supply by the government.

Government policies on taxation and spending to influence the economy.

The central banking system of the U.S., consisting of 12 Federal Reserve Banks.

Central banks issue currency, lend to banks, and supervise them.

State and national banks that provide checking/savings accounts and loans.

Firms that pool money to invest in stocks or bonds.

Payment systems that use electronic methods instead of cash or checks.

Institutions that collect savings to pay retirement benefits.

A banking system where banks hold a fraction of deposits as reserves and lend the rest.

The cash that a bank physically holds in its vaults plus its deposits at the Federal Reserve.

Banks create money by lending out more than the total amount they hold in reserves.

The process by which banks can increase the total money supply through providing loans.

A financial statement showing a bank's assets, liabilities, and net worth at a specific time.

Transactions that influence a bank's reserves, like deposits and loans.

Deposits in bank accounts that can be withdrawn or transferred by writing a check.

The process of transferring funds and updating bank balances when a check is cashed.

Financial instruments issued by the government to borrow money, which banks can purchase.

The ease with which an asset can be converted into cash without affecting its market price.

Situations where a large number of customers withdraw their deposits simultaneously, worrying about bank solvency.

Equity ownership in a company, representing a claim on the company's assets and earnings.