ECOMacroFinal1

  1. The problem of double coincidence of wants is associated with:
    barter system
  2. A bank's assets consist of $500,000 in total reserves, $1,600,00 in loans, and a building worth $1,200,000. Its liabilities and capital consist of $2,00,000 in demand deposits and $1,300,00 in capital.
    If the required reserve ratio is 10%, what is the level of the bank's excess reserves? How much could it loan out as a result?
    $300,000;$3,000,000
  3. A bank's assets consist of $500,000 in total reserves, $1,600,00 in loans, and a building worth $1,200,000. Its liabilities and capital consist of $2,00,000 in demand deposits and $1,300,00 in capital.
    If the required reserve ration is 10%, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?
    $300,000; $3,000,000
  4. Other things being equal, if you took money out of your demand deposit account and put it in a savings deposit account;
    M1 would fall but M2 would not change
  5. A decrease in the percentage of money people want to hold as currency and a decrease in the fraction of deposits banks want to hold as excess reserves. The money supply in the banking system would:
    increase
  6. If inflation is the major problem in the economy, which of the following would be an appropriate monetary policy response
    increasing the discount rate
  7. Which of th efollowing would constitute contractionary monetary policy by the Fed?
    Open market sales of government securities, an increase in the discount rate, and an increase in reserve requirements.
  8. If the Fed sells bonds, the short run impact of this policy will tend to include:
    an increase in real interest rates
  9. If the monetary authorities persistantly expand the money supply at a rapid rate, the probable result will be:
    inflation and high nominal interest rates
  10. If velocity is growing by 2% per year and real output is growing 6% per year, according to the equation of exchange, in order to maintain stable prices, the money supply would have to:
    grow by 4%
  11. M1 includes:
    cash, checking account balances, and travelers' checks
  12. A barter system is less desirable than using oney for exchange because:
    it is a more inefficient and a time consuming process
  13. Which of the following assests is most liquid?



    A funds in a savings account
  14. If the reserve requirement is 15% and a customer makes a new cash deposit of $50,000, how much new excess reserves are created?
    $42,500
  15. Demad deposits are:
    liabilities of banks, assets of depositors.
  16. Which of the following is true?



    C.
  17. Suppose that the exchange rate between British pounds and U.S. dollars is originally $2.50 per pound. If it then changes to $3 for 1 pound, the price of U.S. goods to British importers will:



    B.
  18. If the rate of inflation in the United States rises relative to the rate of inflation in foreign nations, U.S. net exports will tend to __________, causing the exchange value of the U.S. dollar to __________.



    B.
  19. If real interest rates in the United States rise relative to real interest rates in other countries, other things being equal,



    D.
  20. A country would tend to experience currency depreciation relative to other countries if:




    D.
  21. If the dollar appreciates relative to the yen, we would expect:



    D.
  22. Because central banks intervene in currency markets, the term __________ has been used to describe the system.




    B.
  23. Which of the following is true?



    B.
  24. A decrease in tastes for European goods in the U.S. would __________ the demand for Euros, __________ the equilibrium price (exchange value) of Euros.



    A.
Author
hydeab
ID
188528
Card Set
ECOMacroFinal1
Description
Macro Economic Unit 3 test
Updated