Results Form - Results Form http/paws.wcu.edu/mulligan/www/mbch15quiz.html 37(11 out of 30 correct 1 A change in the legal reserve ratio affects

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37% (11 out of 30 correct) 1. A change in the legal reserve ratio affects the: A. amount of actual reserves in the banking system. B. amount of excess reserves in the banking system. C. number of government securities held by the Federal Reserve Banks. D. ratio of coins to paper currency in the economy. 2. Answer the next question(s) on the basis of the information in the following table. R-1 REF15071 Refer to the above table. The equilibrium interest rate in this economy is: A. 3 percent. B. 4 percent. C. 5 percent. D. 6 percent. 3. The sale of government bonds by the Federal Reserve Banks to commercial banks will: A. increase aggregate supply. B. decrease aggregate supply. C. increase aggregate demand. D. decrease aggregate demand. 4. An increase in the legal reserve ratio: A. increases the money supply by increasing excess reserves and increasing the monetary multiplier. B. decreases the money supply by decreasing excess reserves and decreasing the monetary multiplier. C. increases the money supply by decreasing excess reserves and decreasing the monetary multiplier. D. decreases the money supply by increasing excess reserves and decreasing the monetary multiplier. Results Form http://paws.wcu.edu/mulligan/www/mbch15quiz.html 1 of 8 11/8/2009 4:54 PM
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5. An easy money policy in the United States is most likely to: A. decrease the foreign demand for dollars and appreciate the international value of the dollar. B. decrease the foreign demand for dollars and depreciate the international value of the dollar. C. increase the foreign demand for dollars and appreciate the international value of the dollar. D. increase the foreign demand for dollars and depreciate the international value of the dollar. 6. Which of the following is correct ? When the Federal Reserve buys government securities from the public, the money supply: A. contracts and commercial bank reserves increase. B. expands and commercial bank reserves decrease. C. contracts and commercial bank reserves decrease. D. expands and commercial bank reserves increase. 7. R-2 REF15023 Refer to the above balance sheets. The commercial banks have excess reserves of: A. $12. B. $22. C. $16. D. $24. 8. Assume that a single commercial bank has no excess reserves and that the reserve ratio is 20 percent. If this bank sells a bond for $1,000 to a Federal Reserve Bank, it can expand its loans by a maximum of: A. $1,000. B.
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This note was uploaded on 12/06/2009 for the course ECO Macro123 taught by Professor Yung during the Spring '09 term at Culver-Stockton.

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Results Form - Results Form http/paws.wcu.edu/mulligan/www/mbch15quiz.html 37(11 out of 30 correct 1 A change in the legal reserve ratio affects

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