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Additional Exercise 5 (Ch. 16 - 18) 1.Which of the following lists is included in what economists call money? a. Cash* b. cash and stocks and bonds c. cash and stocks and bonds and real estate d. cash and stocks and bonds and real estate and all other assets 2.You receive money as payment for babysitting your neighbors' children. This best illustrates which function of money? a. medium of exchange* b. unit of account c. store of value d. liquidity 3.Paper dollars a. are commodity money and gold coins are fiat money. b. are fiat money and gold coins are commodity money.* c. and gold coins are both commodity monies. d. and gold coins are both fiat monies. 4.Which of the following is not included in M1? a. a $5 bill in your wallet b. $100 in your checking account c. $500 in your savings account* d. All of the above are included in M1. 5.Given the following information, what are the values of M1 and M2? S m a ll ti m e d e p o s it s $650 billion D $300 billion e m a n d d e p o s it s a n d o t h e r c h e c k a b l e d e p o s it s S a v i n g s d e p $750 billion o s it s M o n e y m a r k e t m u t u a l f u n d s $600 billion T r a v e l e r' s c h e c k s $25 billion L a r g e $600 billion ti m e d e p o s it s C u r r e n c y $100 billion M i s c e ll a n e o u s c a t e g o r i e s i n M 2 $25 billion a . M1 = $400 billion, M2 = $2,475 billion. b . M1 = $125 billion, M2 = $3,025 billion. c . M1 = $425 billion, M2 = $2, 450 billion.* d . M1 = $425 billion, M2 = $1,875 billion. 6.At the Federal Reserve, a. the nations monetary and fiscal policies are made by the Federal Open Market Committee, which meets about every six weeks. b. the nations monetary and fiscal policies are made by the Federal Open Market Committee, which meets twice a year. c. the nations monetary policy is made by the Federal Open Market Committee, which meets about every six weeks.* d. the nations monetary policy is made by the Federal Open Market Committee, which meets twice a year. 7.A bank loans Kellie's Print Shop $350,000 to remodel a building near campus to use as a new store. On their respective balance sheets, this loan is a. an asset for the bank and a liability for Kellie's Print Shop. The loan increases the money supply.* b. an asset for the bank and a liability for Kellie's Print Shop. The loan does not increase the money supply. c. a liability for the bank and an asset for Kellie's Print Shop. The loan increases the money supply. d. a liability for the bank and an asset for Kellie's Print Shop. The loan does not increase the money supply. 8.The manager of the bank where you work tells you that your bank has $5 million in excess reserves. She also tells you that the bank has $300 million in deposits and $255 million dollars in loans. Given this information you find that the reserve requirement must be a. 50/255.... View Full Document

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