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

Can you write a great paper on a research economic topic10

Can you write a great paper on a Research economic topic 10 page paper Including abstract, introduction, content and conclusion, reference. You can choose any economic topics and analyze the issue from your own perspecti ...

Task list principles of microeconomicsyou are starting

Task List: : Principles of Microeconomics You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estim ...

Desserts by jb case studyjay brown jb to his friends is a

Desserts by J.B Case Study Jay Brown (J.B. to his friends) is a student at the North-west Culinary Institute and specializes in preparing elab-orate desserts. After graduation. J.B. wants to open up a bakery. The bakery. ...

Assignment emerging economies and Assignment: Emerging Economies and Globalization

Assignment: Emerging Economies and Globalization Background Markets in developed economies are approaching saturation level. Therefore, MNCs are searching for new untapped markets in emerging countries such as India and ...

Assignmentthe paper is on googles business ethics in the

Assignment The paper is on Google's Business Ethics in the area of Sustainability. How does Google contribute or detract from various aspects of sustainability? Sustainable businesses make products and services which fil ...

Short answer amp essay questionsyou must complete two short

Short Answer & Essay Questions You must complete two Short answer questions and one Essay question All answers must be in the form of a paragraph (minimum of 5 sentences per paragraph). Please select from below: Short An ...

Application evaluation of research resultsno research

Application: Evaluation of Research Results No research project or study is perfect. Studies that contain errors can produce unreliable or misleading results. As a consumer of research, you must be able to determine the ...

Great depression economy paperwritten assignmentplease

Great depression , economy paper Written Assignment Please provide a comprehensive answer to the following two questions: 1) Which were the main causes of the Great Depression? 2) Why did the Great Depression last so lon ...

Microeconomics assignmentquestion 1 - read attachment

MICROECONOMICS ASSIGNMENT Question 1 - Read Attachment 1 Answer the following questions. Use diagrams where appropriate. [Assume that the Australian grape and wine industries are perfectly competitive markets]: Use deman ...

Assignmentvirtually all general managers face

Assignment Virtually all general managers face capital-budgeting decisions in the course of their careers. The most common of these is the simple "yes" versus "no" choice about a capital investment. Regardless of the typ ...

  • 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

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen