Macroeconomics ECON 2301 Fall 2009 Marilyn Spencer, Ph.D.



ECON 2301

Fall 2009

Marilyn Spencer, Ph.D.

Professor of Economics

Review of Chapters 15, 16 & 19

Third Exam: December 2

100 points possible

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 &


• 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:

Four major functions of money

If something acts as money, what properties it must have

Commodity money v. fiduciary money

Importance and major role of financial intermediaries

Federal Reserve System (Fed)

Major components

Major responsibilities

• Reserves: legal, required & excess resserves

Federal Deposit Insurance Corporation

Moral hazard in the context of financial intermediaries

Chapter 16 Exam Question Topics:

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:

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

Primary objectives/responsibilities

Least often used tool

Foreign direct investment

Federal Deposit Insurance

Good Luck!!!