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Unformatted text preview: ed Reserves C) Excess Reserves = Deposits - Loans D) Excess Reserves = Loans - Required Reserves 4) If the reserve requirement percentage is .05 then the simple deposit multiplier is A) 10 B) 5 C) 2 D) 20 5) If the Federal Open Market Committee wants to decrease the money supply through open market operations it will A) buy U.S. Treasury Securities. B) sell U.S. Treasury Securities. C) increase the discount rate. D) decrease the discount rate. 6) The quantity theory of money assumes that A) the velocity of money is negative. B) the velocity of money is constant. C) the velocity of money is zero. D) the velocity of money fluctuates unpredictably. 7) The money market model is concerned with ________ and the loanable funds market model is concerned with ________. A) short-term real interest rates; long term nominal interest rates B) short-term nominal interest rates; long term nominal in...
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- Spring '09