Macroeconomics ECON 2301 Spring 2011 Marilyn Spencer, Ph.D.

ECON 2301
Spring 2011
Marilyn Spencer, Ph.D.
Professor of Economics
Chapters 15 & 16 Review
3rd Exam: 100 points possible
Miller’s Chapters 15 & 16
Wednesday, April 27
 Section 003 – 20 (Setion 004 – 25) multiple choice
questions, worth 5 (4) points each (100 points
total) + 3 extra credit questions
 You may select among resources you’ll use, as
with previous exams.
 I’ll provide the Scantron sheets.
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 #: ______________________ (some portion of ID#)
Signature: ___________________________
Chapter 15 Exam Question Topics:
Four major functions of money
For something to act as money, the 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 reserves
Federal Deposit Insurance Corporation
Asymmetric information, adverse selection & 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
Assignment for our next regular class:
Be ready to review for the final exam!!!
If you plan to take the final exam, you must email me
to tell me by noon:
 Section 003 (10 a.m. class): Thurs., May 5
 Section 004 (5:30 p.m. class): Monday, May 9