The ability of a financial asset to be used to immediately make
transactions is called:
store of value.
medium of exchange.
illiquidity.
liquidity.
1 / 1 point
Question 2
Large denomination time deposits are included in:
M1.
M2.
M3.
L.
1 / 1 point
Question 3
Contractionary monetary policy increases the federal funds rate.
True
False
1 / 1 point
Question 4
Credit cards do not fulfill the three functions of money.
True
False
Question 5
1 / 1 point
The function of money that enables prices of goods and services to be
quoted is called:
medium of exchange.
store of value.
unit of account.
measure of power.
0 / 1 point
Question 6
An increase in the reserve requirement would:
decrease excess reserves and reflect an expansionary monetary policy.
decrease excess reserves and reflect a contractionary monetary policy.
increase excess reserves and reflect an expansionary monetary policy.
increase excess reserves and reflect a contractionary monetary policy.
1 / 1 point
Question 7
The simple deposit multiplier is:
1/excess reserves.
1/reserve requirement.
1/deposit requirement.
none of these.
1 / 1 point
Question 8
The simple deposit multiplier is larger than the money multiplier.
True
False
0 / 1 point
Question 9
Open market sale will result in:
increase in bank reserves and a decrease in the federal funds rate.
increase in bank reserves and an increase in the federal funds rate.
decrease in bank reserves and a decrease in the federal funds rate.
decrease in bank reserves and an increase in the federal funds rate.
1 / 1 point
Question 10
The discount rate is influenced by Fed actions whereas the Fed sets the
federal funds rate.
True
False
1 / 1 point
Question 11
Open market sale of government securities by the Fed decreases the
federal funds rate.
True
False
Question 12
0 / 1 point
Open market purchase of government securities by the Fed increases
the federal funds rate.
True
False
Question 13
0 / 1 point
The money multiplier is computed as follows:
(c + 1)/(c + rr + e).
(c + 1)/(c + rr).
1/rr.
(c + 1)/(c + e).
1 / 1 point
Question 14
The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is
0.07. The excess reserve ratio, e, is 0.10. What is the size of the money
multiplier?
4.70
4.07
4.75
4.00
Question 15
There are ________ voting members on the FOMC.
4
7
12
15
1 / 1 point