ScienceEconomicsMacro Ch. 16
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Macro Ch. 16

Destiny Jones avatar Destiny Jones
18 October 2022
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question
Mia puts money into a piggy bank so she can spend it later. What function of money does this illustrate?
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store of value
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Which of the following best illustrates the medium of exchange function of money?
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you pay for your double latte using currency
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Commodity money is
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money with intrinsic value.
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How many regional banks does the Federal Reserve have?
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12
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How many members does the Board of Governors have?
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7
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How many terms do the Board of Goveners Serve?
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14
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Under a fractional reserve banking system, banks
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generally lend out a majority of the funds deposited
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The money supply increases when the Fed
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buys bonds. The increase will be larger the smaller the reserve ratio is
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The money supply decreases if the Fed
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sells Treasury bonds. The smaller the reserve requirement, the larger the decrease will be.
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Which of the following lists two things that both increase the money supply?
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the Fed buys bonds and lowers the discount rate
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Which of the following lists two things that both increase the money supply?
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Lower the discount rate, lower the reserve requirement ratio
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Today, bank runs are
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uncommon because of FDIC deposit insurance
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The Federal Funds rate is the interest rate
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banks charge each other for short-term loans of reserves.
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An increase in the money supply might indicate that the Fed had
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purchased bonds in an attempt to reduce the federal funds rate
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A decrease in the money supply might indicate that the Fed had
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sold bonds in an attempt to increase the federal funds rate
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Money
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is more efficient than barter. makes trades easier. allows greater specialization.
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M1 equals currency + demand deposits +
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traveler's checks + other checkable deposits.
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Which of the following is included in M2 but not in M1?
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savings deposits
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Credit cards
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are not included in any measure of the money supply
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Which of the following has a four-year term?
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The Chair of the Board of Governors
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The 12 regional Federal Reserve Banks
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regulate banks in their districts
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When the Fed conducts open-market sales,
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it sells Treasury securities, which decreases the money supply
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The Fed can increase the money supply by conducting open market
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purchases and lowering the discount rate