Ceteris paribus the money supply becomes smaller when

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Macroeconomics for Today
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Chapter 15 / Exercise 6
Macroeconomics for Today
Tucker
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47. Ceteris paribus, the money supply becomes smaller when: A. The Federal Reserve reduces the reserve requirement. B. An individual deposits currency into her transactions account. C. An individual repays the money that he borrowed from a bank. D. A bank reduces its excess reserves to make a loan. Repayment of loans decreases the money supply because there is less money is circulation.
AACSB: Reflective Thinking Blooms: Analyze Difficulty: 3 Hard Learning Objective: 13-03 Describe how a bank creates money. Topic: Creation of Money 48. Ceteris paribus, if Tamika pays off a loan at the bank then over time:
AACSB: Reflective Thinking Blooms: Analyze Difficulty: 3 Hard Learning Objective: 13-03 Describe how a bank creates money. Topic: Creation of Money
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Macroeconomics for Today
The document you are viewing contains questions related to this textbook.
Chapter 15 / Exercise 6
Macroeconomics for Today
Tucker
Expert Verified
49. The assets held by a bank to fulfill its deposit obligations are known as:
AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-03 Describe how a bank creates money. Topic: Creation of Money 50. If there is only one bank in an economy:
AACSB: Reflective Thinking Blooms: Analyze Difficulty: 3 Hard Learning Objective: 13-03 Describe how a bank creates money. Topic: Creation of Money
51. The term fractional reserves refers to: A. The fact that reserves are split among many banks. B. Reserves being a fraction of total deposits. C. The ratio of required reserves to total loans. D. The ratio of excess reserves to total loans. Bank reserves are only a fraction of total transactions deposits.
AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-03 Describe how a bank creates money. Topic: Creation of Money 52. If you deposit $1,000 in your checking account, your bank is only required to hold a portion of the deposit and is allowed to lend out the balance. This illustrates the concept known as:
AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-03 Describe how a bank creates money. Topic: Creation of Money

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