Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

True or False problems.

1) To compute required reserves, you must multiply the required reserve ratio by the amount of transactions account balances on the bank's balance sheet.

2) In 1988 more banks failed than in any year since the Great Depression.

3) How well fiscal policy works depends on how much the velocity of money can be changed by government tax and spending decisions.

4) The Federal Open Market Committee impacts the economy via open market operations.

5) Without money, the process of acquiring services and goods would be much more efficient.

6) A horizontal aggregate supply curve causes higher inflation, instead of higher output, to result from increases in the money supply.

7) Only the federal government can create money.

8) When cash or coins are deposited in a transactions account at a bank, the size of M1 changes.

9) By increasing the required reserve ratio, the Fed can immediately decrease the lending capacity of the banking system.

10) The Fed now targets the federal funds rate instead of the money supply.

11) Transactions accounts permit for direct payment to a third party.

12) All checking accounts are transactions accounts.

13) Raising the reserve requirement decreases the money supply.

14) Open-market operations are the principal method for directly altering the reserves of the banking system.

15) When you pay off a loan at a bank, the money supply becomes smaller.

16) Regulations are a main constraint on deposit creation.

17) The federal funds rate reflects the cost for banks to borrow from the other banks.

18) The primary objective of Fed open market activity is to change the price of bonds and their yields.

19) When the Fed buys bonds, the money supply rises.

20) M1 is the most liquid form of money.

21) A change in the discount rate changes the size of money multiplier.

22) Because monetarists believe that output is sensitive to changes in the money supply, they suggest the money supply be allowed to grow at a constant rate.

23) If the minimum reserve ratio is 20 %, then $1 of reserves can support a maximum of $10 more in transactions deposits.

24) Each bank can lend an amount equavalent to its total reserves and no more.

25) According to the equation of exchange, total spending will increase if the money supply reduces and velocity is stable.

26) The reduction in the minimum required reserve ratio will decrease the money multiplier.

27) When cash or coins are deposited in the transactions account at a bank, the money supply instantly increases by the amount of the deposit multiplied by the money multiplier.

28) The reserve requirements and discount rates affect M2 though do not have much impact on M1.

29) As the price of a bond rises, its yield increases.

30) The banking system creates additional money by making loans equavalent to total reserves.

31) If banks are willing to make loans and consumers and businesses are willing to borrow money, this constrains the money supply.

32) The most profitable manner for a bank to maintain the minimum required reserves is to hold large amounts of excess reserves.

33) When someone takes out a loan at a bank, the money supply becomes smaller.

34) When the Fed buys bonds from the public, it reduces the flow of reserves to the banking system.

35) The globalization of money weakens the Fed's control over the money supply.

36) The success of Fed intervention depends in part on how well changes in long-term interest rates mirror changes in short-term interest rates.

37) If banks don't have enough reserves to satisfy the reserve requirement, they can borrow additional reserves in the federal funds market.

38) The liquidity trap exists as some portion of the money demand curve is horizontal.

39) The ability of the banking system to make loans depends on excess reserves and the reserve requirement.

40) The price of money is the interest rate.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91743

Have any Question? 


Related Questions in Microeconomics

Assignment external financinggenesis energys newly

Assignment: External Financing Genesis Energy's newly established operations management team decided to seek outside assistance in developing a long-term operating plan that also addresses the financial issues identified ...

Assignmentafter read two articles then answer the questions

Assignment After read two articles then answer the questions below Cellini: - How does Cellini criticize Bandinelli's sculpture Hercules and Cacus (1534)? - What technical difficulties does Cellini encounter in making hi ...

Principles of economics1 which statement is truea today

Principles of Economics 1. Which statement is true? A) Today more workers in the U.S. are members of labor unions than any time in our history. B) Today labor unions are weaker than any time in the last 100 years. C) No ...

Topic 1 perfectly competitive market structurea perfectly

Topic 1: Perfectly Competitive Market Structure A perfectly competitive market structure has key features. 1. There are many buyers and sellers so neither side of the market has market power. 2. The product provided to t ...

Assignmentin 2014 southwest airlines was the market share

Assignment In 2014, Southwest Airlines was the market share leader in domestic air travel in the United States. Widely known for its low fares and pleasing customer service, Southwest transported more passengers from U.S ...

Economics money bankingintroductioneconomics money and

Economics Money Banking Introduction Economics Money and Banking focuses on the traditional model of money and banking in the American banking system, a mixed capitalist economy. The course explains the functions of mone ...

Question should insider directors constitute the majority

Question: Should insider directors constitute the majority of a corporate board instead of investors?

Assignmentyou have been offered a paralegal position with a

Assignment You have been offered a paralegal position with a firm in Raleigh, NC. A local winemaker has contacted your firm for legal assistance. No one in the firm knows anything about this subject but would like to exp ...

Assignmentthis final project paper will utilize many of the

Assignment This final project paper will utilize many of the sections of material you have studied during the duration of this course. You will make use of your own personal observations and occupational experiences to e ...

1 a consumers preference ordering over baskets of goods x1

1. A consumer's preference ordering over baskets of goods (x1, x2) includes the following: i) she is indifferent between (5, 90) and (35, 10); ii) she strictly prefers (20, 50) to (5, 90). Check whether convexity of pref ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate