Week 4.docx Quiz.docx - Week 4 Money and the Federal Reserve Quiz 1 A)The reserve requirement is determined by the Board of Governors B Open market

Week 4.docx Quiz.docx - Week 4 Money and the Federal...

This preview shows page 1 - 2 out of 3 pages.

Week 4: Money and the Federal Reserve Quiz 1. A)The reserve requirement is determined by the: Board of Governors B) Open market operations are determined by the: Federal Open Market Committee. 2. A) Sam gives the grocery store clerk a $5 bill to pay for his purchase. Medium of exchange B) Bill looks at the $20 price tag on a clock to see how much money he would need to purchase it. : Unit of account C) Maria writes a check to pay her electric bill. : Medium of Exchange D) Susan transfers some of her wealth from her checking account into a certificate of deposit that earns interest. : Store of value 3. The part of the Federal Reserve that determines and implements the nation's monetary policy and controls the money supply to promote stable prices and economic growth is the: Federal Open Market Committee. 4. Suppose the Federal Reserve increases the amount of reserves by $100 million and the total money supply increases by $500 million. A) What is the money multiplier? 5 B) Using the money multiplier from part a, how much will the money supply change if the Federal Reserve increases reserves by $50 million? 250 Million 5. Suppose that Ava withdraws $300 from her savings account at Second Bank. The reserve requirement facing Second Bank is 10%. Assume the bank does not wish to hold any excess reserves of new deposits. Use this information to complete the balance sheet below to show how Second Bank's assets and liabilities change when Ava withdraws the $300 from the bank. Change in Reserves: $ -30 Change in Loans: $ -270 Change in Deposits: $ -300 6. The Federal Reserve District Banks are divided: into geographical regions with the majority of the district banks located in the eastern half of the United States.
Image of page 1

Subscribe to view the full document.

Image of page 2
  • Summer '16

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes