Quiz 5 - sury. (c) is com pose d of me mbe rs of Con gres...

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Quiz 5 M1 is defined as
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(a) gold certif icate s. (b) time dep osits . (c) curr ency held by the publi c, plus dem and dep osits , NO W acco unts, and trav eler' s chec ks. (d) mon ey mar ket mut ual fund s.
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Suppose a bank has $40 million in deposits (a liability to the bank), to which a required reserve ratio of 10% is applicable. Assuming the bank holds no excess reserves, what is the total dollar value of the bank's currency and deposits in the Federal Reserve bank? (a) $40 milli on. (b) $40 0 milli on. (c) $1 milli on. (d) $4 milli on.
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The Federal Reserve System
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(a) was crea ted in the 197 0s. (b) is com pose d of me mbe rs of the Trea
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Unformatted text preview: sury. (c) is com pose d of me mbe rs of Con gres s. (d) exer cise s cont rol over the U.S. mon ey supp ly. An increase in the required reserve ratio decreases excess reserves and tends to (a) decr ease the mon ey supp ly. (b) incre ase the mon ey supp ly. (c) caus e no chan ge in the mon ey supp ly. (d) incre ase or decr ease the mon ey supp ly. What effect do open market purchases have on the money supply curve? (a) The y shift it to the left. (b) The y caus e a mov eme nt dow nwar d alon g the supp ly curv e. (c) The y shift it to the right . (d) The y caus e a mov eme nt upw ard alon g the supp...
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Quiz 5 - sury. (c) is com pose d of me mbe rs of Con gres...

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