Assignment 4

Assignment 4 - Econ 500 Fall 2011 Z. Janko DEPARTMENT OF...

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DEPARTMENT OF ECONOMICS Econ 500 (01) – Money and Banking Fall 2011 Assignment 4 Assigned Nov. 10 st , 2011 DUE Nov. 17 th , 2011 This HW covers chapter 17. There are 12 multiple choice questions on this assignment, many of which require calculations. Take your time answering these questions. I will grade all questions. For each incorrect multiple choice question, I will take of 2.5 points. If you do not provide work for the questions that need to show work (see below), I will take off additional 2.5 points per question (or just 2.5 points if the answer is correct). Circle the best answer. When uncertain, choose the best answer possible. Multiple Choice CHAPTER 17 There are 4 questions that require that you show work. In other words, you need to provide complete calculations that show how you arrived at the answer. 1. The deposit multiplier in the simple model is equal to 4 when the desired reserve ratio is equal to a. 0.25 b. 0.40 SHOW WORK! c. 0.05 d. 0.15 2. The monetary base is comprised of a. Currency in circulation and deposits b. currency in circulation and government securities c. Currency in circulation and reserves d. Reserves and government securities 3. A sale of government bonds by the FED (choose the best answer!) a. Is called an open market sale b. Reduces the monetary base, all else the same. c.
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Assignment 4 - Econ 500 Fall 2011 Z. Janko DEPARTMENT OF...

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