economics 2301 ch 10-12 - Question Results Question 1...

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Question Results Question 1: ________________ invested or made loans with 95 percent of the deposits that were being held. Type: Multiple Choice Points Awarded: 1/1 Your Answer(s): Goldsmiths Correct Answer(s): Adam Smith Milton Friedman John Say Goldsmiths (correct) Question 2: In the United States, the fractional reserve policy that governs commercial banking is controlled by the ______________. Type: Multiple Choice Points Awarded: 1/1 Your Answer(s): Federal Reserve Correct Answer(s): Treasury Department Comptroller of the Currency Bureau of Engraving and the U.S. Mint Federal Reserve (correct) Question 3:
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When a customer deposits currency in a bank, the Cash Account (an Asset account) increases for the bank, but the Checkable Deposit Account (a ________________ account) of the bank also increases to “balance the books”. Type: Multiple Choice Points Awarded: 1/1 Your Answer(s): Liability Correct Answer(s): Net Worth Liability (correct) Net Income Profit Question 4: When a customer deposits $100 of cash into their checking account at a bank, there is an increase within the bank’s equation (A = L + NW), but there is ______________ in the aggregate M1. Type: Multiple Choice Points Awarded: 1/1 Your Answer(s): no change Correct Answer(s): a decrease also an increase no change (correct) none of the above Question 5: The _________________ are assets a bank can employ to satisfy the fractional holding requirements and include only cash in the vault or deposits with the Fed.
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Type: Multiple Choice Points Awarded: 1/1 Your Answer(s): Legal Reserves Correct Answer(s): Excess Reserves Required Reserves Legal Reserves (correct) None of the above Question 6: The depositors’ funds that are greater than the required reserve are called ____________ reserves and may be loaned. Type: Multiple Choice Points Awarded: 1/1 Your Answer(s): excess Correct Answer(s): excess (correct) legal extenuating none of the above Question 7: A bank holds the required reserve off of a new loan / deposit for one customer and then lends the excess reserve to someone else, repeating the _______________ process many times. Type: Multiple Choice
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Points Awarded: 1/1 Your Answer(s): money creation Correct Answer(s): money creation (correct) money destruction both a. and b. none of the above Question 8: When a loan is repaid to a bank there are __________ funds available in the M1 money supply. Type: Multiple Choice Points Awarded: 1/1 Your Answer(s): fewer Correct Answer(s): more still the same amount of fewer (correct) none of the above Question 9: The multiple credit expansion process based on excess reserves _______ reverse when loans are repaid. Type: Multiple Choice Points Awarded: 1/1 Your Answer(s): does
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Correct Answer(s): does not does (correct) does sometimes none of the above Question 10: Assume $1,000 is deposited in a checkable account by Mr. Y in Bank A. Assume further that the reserve requirement is 0.10. The initial amount of money which can be created by this excess reserve within Bank A is $________ .
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