Econ 211 Chapter 29 Questions

Which of the following is an example of barter?

Money

Economists use the word "money" to refer to

Which of the following lists is included in what economists call "money"?

Liquidity refers to

Which list ranks assets from most to least liquid?

According to the article "Why Gold?', silver may be used as money. One problem with using silver as money is that

Many societies used gold as money, because

Fiat money

Currently, U.S. currency is

All U.S. paper dollars read "This note is legal tender for all debts, public and private." This statement represents which characteristic of US currency?

Which of the following is NOT required for paper dollars to work as a medium of exchange?

The set of items that serve as media of exchange clearly includes

Economists call an institution designed to oversee the banking system and regulate the quantity of money in the economy

The members of the Federal Reserve's Board of Governors

The Federal Reserve

An important function of the U.S. Federal Reserve is to

Which group within the Federal Reserve System meets to discuss changes in the economy and determine monetary policy?

The Fed has the power to increase or decrease the number of dollars in the economy through the decisions of

When conducting an open-market sale, the Fed

When conducting an open-market purchase, the Fed

Over one time horizon or another, Fed policy decisions influence

Which of the following does the Federal Reserve not do?

Reserves are

In a system of 100-percent-reserve banking,

In a system of 100-percent-reserve banking, the purpose of a bank is to

A bank which must hold 100 percent reserves opens in an economy that had no banks and a currency of $150. If customers deposit $50 into the bank, what is the value of the money supply?

In a fractional-reserve banking system, a bank

Under a fractional-reserve banking system, banks

Banks are able to create money only when

A bank's reserve ratio is 8 percent and the bank has $1,000 in deposits. Its reserves amount to

When a bank loans out $1,000, the money supply

If the reserve ratio is 8 percent, then an additional $800 of reserves can increase the money supply by as much as

If the central bank in some country raised the reserve requirement, then the money multiplier for that country

In the 19th century, when crop failures often led to bank runs, banks would make relatively fewer loans and hold relatively more excess reserves. By itself, these actions by the banks should have

During the Great Depression in the early 1930s,

Today, bank runs are not a major problem for the U.S. banking system because

The discount rate is the interest rate that

When the Fed decreases the discount rate, banks will

If the discount rate is lowered, banks borrow

To increase the money supply, the Fed could