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ECON_120_chap_13_test_ans

ECON_120_chap_13_test_ans - c i‘r‘our location...

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Unformatted text preview: c i‘r‘our location: Assessments > View All Submissions > View Attempt View Attempt 1 of 1 Title: Ch 13 Quiz Started: November 22. 2008 11:28 PM Submitted: November 22. 2008 11:40 PM Time spent: 00:12:18 Total score: BIS = 60% E Total score adjusted bv 0.0 E Maximum possible score: 5 Ivli'hen people transfer money from their checking accounts to their savings accounts: A. M1 falls and M2 rises. . M1 falls 100% E Correct. M2 contains the components of M1 plus savings accounts and M2 and monev market funds. Thus, if you transfer monev out of M1 to remains M2, M2 does not change because it alreadv accounted for the constant. monev. C. M1 rises and M2 falls. D. M1 remains constant and M2 rises. Score: 1,-‘1 Suppose that the reserve ratio is 12.5%. After a customer makes a $1.000 deposit in her bank, that deposit will create checking account balances equal to: a A. The original 0% Incorrect. The initial $1000 will be pumped up bv the money $1,000 multiplier which is lfreserve ratio. H.125 eguals 8 so $8000 in cash checking accounts balances will be created. deposit. 0. $125. c. $0000. 0. $0. Score: 0,-‘1 Assuming there are no leakages out of the banking svstem. a monev multiplier equal to 10 means that: A. The reserve ratio equals 10. 8. An additional $10 of reserves create one dollar of deposits. B C. Each 0% Incorrect. It is the opposite. The monev multiplier shows the additional relationship between the final change in deposits and the change dollar of in reserves that caused it. deposks creates $10 of reserves. 0. Each H additional dollar of reserves creates $10 of l depoSIts. Score: 0,-‘1 4. Iv‘v'hen one individual writes a check to another and the ether deposits the check in the bank: A. the money supply will increase. B. The money supply will decrease. B C. the money 100% 5 Correct. When one individual writes a check to another and the supply will other deposits the check in the bank, the money supply will not not change. Instead, the expansion in one bank’s reserves will offset change. the contraction in the reserves of the other. D. the money supply could increase or decrease. Score: Ill 5. Fill in the blanks. The Federal Open Market Committee (FOMC) is a -person board consisting of members of the Board of Governors, the president of the New York Federal Reserve Bank; plus the presidents of other regional Federal Reserve Banks. fl. twenty; four; seven 3 B. twelve; 100% H Correct. The Federal Open Market Committee (FOMC) is a seven; four 12-person board consisting of the seven members of the Board of Governors, the president of the New York Federal Reserve Bank, plus the presidents of four other regional Federal Reserve Banks. C. seven; four; three 0. fourteen; seven; seven Score: ly‘l ...
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