Marilyn Spencer, Ph.D.
Professor of Economics
Review of Chapters 15, 16 & 19

Miller’s Chapters 15, 16 & 19
 25 multiple choice questions, worth 4 points each
(100 points total)
• Will need to write an bubble in your name &
ID#
• Will need to place answers on Scantron bubble sheet, along with your name, ID#, course & section #’s

Test Resources Used
Please check any applicable box concerning "fees" for test resources you plan to use DURING the exam:
 3x5 card with notes, 5 test points
 textbook and notebook, 15 test points
 information from others,100 test points
 Will NOT use additional resources*
* Two (2) points will be added to your score if you choose to
NOT use any of these test resources.
Name (please print): ____________________
ID #: ______________________
Signature: ___________________________

Chapter 15 Exam Question Topics:
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Four major functions of money
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If something acts as money, what properties it must have
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Commodity money v. fiduciary money
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Importance and major role of financial intermediaries
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Federal Reserve System (Fed)
•
Major components
•
Major responsibilities
• Reserves: legal, required & excess resserves
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Federal Deposit Insurance Corporation
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Moral hazard in the context of financial intermediaries

Chapter 16 Exam Question Topics:
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Fractional reserve banking
• The effect of a new deposit (or withdrawal) on a single bank’s ability to make loans
•
The effect of a new deposit from outside the banking system on the amount of money in the banking system
•
Formula for the maximum money (deposit expansion) multiplier – and how to use that formula
Three tools of monetary policy & how/why the Fed conducts expansionary (or contractionary) monetary policy
Federal Funds Market/Federal Funds Rate
Fed as “lender of last resort”
Relationship between bond price & bond yield (% interest)
 Federal Deposit Insurance

Chapter 19 Exam Question Topics:
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Economic growth
Per capita rate of economic growth
Economic freedom
Relationship between economic growth and economic freedom
 World Bank
•
Primary objectives/responsibilities
•
Problems of moral hazard and adverse selection
 International Monetary Fund
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Primary objectives/responsibilities
•
Least often used tool
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Foreign direct investment
Federal Deposit Insurance