1 / 13

The Monetary System

11. The Monetary System. CLICKER QUESTIONS. Checkpoint 11.4. Checkpoint 11.1. Checkpoint 11.2. Question 8. Question 1. Question 4. Question 9. Question 2. Question 5. Question 10. Question 3. Checkpoint 11.3. Question 6. Question 7. CHECKPOINT 11.1. Question 1

bunme
Download Presentation

The Monetary System

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. 11 The Monetary System CLICKER QUESTIONS

  2. Checkpoint 11.4 Checkpoint 11.1 Checkpoint 11.2 Question 8 Question 1 Question 4 Question 9 Question 2 Question 5 Question 10 Question 3 Checkpoint 11.3 Question 6 Question 7

  3. CHECKPOINT 11.1 Question 1 Which of the following best defines what money is now and what it has been in the past? • currency • currency plus checking deposits • currency plus credit cards • anything accepted as a means of payment • anything used as a store of value

  4. CHECKPOINT 11.1 Question 2 Individuals and firms hold $800 billion in currency, $10 billion in traveler’s checks, and $700 billion in checkable deposits; savings deposits are $4,000 billion; small time deposits are $1,000 billion; and money market funds and other deposits are $800 billion, then M1 equals ____ billion. • $7,310 • $5,800 • $2,510 • $1,510 • $710

  5. CHECKPOINT 11.1 Question 3 Credit cards, debit cards, and e-checks are ________. • always counted as money • not money • sometimes counted as money, depending on how they are used • sometimes counted as money, depending on what is purchased • sometimes counted as money, depending on what measure of money is being used

  6. CHECKPOINT 11.2 Question 4 A commercial bank’s reserves are _____. • the safe U.S. government bonds that it owns • the provision of funds to businesses and individuals • the currency in its vault plus the balance on its reserve account at a Federal Reserve Bank • the savings and time deposits that it holds • the loans it has made

  7. CHECKPOINT 11.2 Question 5 Banks’ assets include _______. • liquid assets, loans, securities, and reserves • reserves, savings deposits, securities, and loans • reserves, securities, liquid assets, and savings deposits • securities, reserves, checkable deposits, and liquid assets • reserves, checkable deposits, securities, and loans

  8. CHECKPOINT 11.3 Question 6 If Federal Reserve notes and coins are $765 billion, and banks’ reserves at the Fed are $8 billion, banks’ liquid assets are $11 billion, and the Fed owns $725 billion of government securities, the monetary base equals _______. • $765 billion • $773 billion • $776 billion • $744 billion • $1,509 billion

  9. CHECKPOINT 11.3 Question 7 The Fed’s policy tools include _________. • holding deposits for the U.S. government, reserve requirements, and the discount rate • setting regulations for lending standards and extraordinary crisis measures • supervision of the banking system and buying and selling commercial banks • required reserve ratios, the discount rate, and open market operations, extraordinary crisis measures • required reserve ratios, mortgage rates, and open market operations

  10. CHECKPOINT 11.4 Question 8 If the Fed buys government securities, then _______. • the composition of money changes but not the quantity of money does not • new bank reserves are created • the quantity of money decreases • bank reserves are destroyed • banks’ excess reserves decrease

  11. CHECKPOINT 11.4 Question 9 The money multiplier determines the increase in the _____. • monetary base when the Fed purchases government securities • quantity of money when the monetary base increases • monetary base when the quantity of money increases • quantity of money when the desired reserve ratio increases • monetary base when the Fed sells government securities.

  12. CHECKPOINT 11.4 Question 10 The Fed makes an open market purchase, which increases the monetary base by $200,000. If the currency drain ratio is 33 percent of deposits and the desired reserve ratio is 10 percent, the quantity of money increases by ______. • $800,000 • $333,333 • $2,000,000 • $618,605 • $465,116

More Related