GECON 200 – Examination

GECON 200 – Examination - GECON 200...

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GECON 200 – Examination #4 - ANSWERS ARE BELOW All questions are worth 3 points except question #1 (worth 6 pts) and question #13 (worth 1 pt). 1.(a) Define: excess reserves (b) Identify one automatic stabilizer discussed in this course. (c) Describe (as concisely as you can) a situation in which the velocity of money has clearly decreased by 3%. 2. (a) Provide an example of commodity money (b) Provide an example of contractionary fiscal policy (c) Provide an example of a federal expenditure (that is not a federal purchase) 3. If someone who held $5000 in cash were to deposit it in a bank when the required reserve ratio is 0.40:(a) What is the maximum increase in checking account deposits that could result?(b) What is the maximum increase in the money supply that could result?(c) What is the maximum increase in M2 that could result? 4. Identify the policy tools that the Fed uses to control the money supply. 5. Did bank runs usually affect the money supply? If so, how? (i.e.,
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This test prep was uploaded on 04/20/2008 for the course GECON 200 taught by Professor Subrick during the Fall '08 term at James Madison University.

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GECON 200 – Examination - GECON 200...

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