We have sent an email with your new password.

Close this window

Ch. 14 How Banks And Thrifts Create Money

10 Questions  I  By Ecofanics
Finance Quizzes & Trivia
Ch 14 McConnell and Brue.

  
Changes are done, please start the quiz.


Question Excerpt

Removing question excerpt is a premium feature

Upgrade and get a lot more done!
1.  Legal reserves permit the Board of Governors of the Federal Reserve System to influence the lending ability of commercial banks.
A.
B.
2.  A single commercial bank can safely lend an amount equal to its excess reserves multiplied by the monetary multiplier ration.
A.
B.
3.  There is a need for the Federal Reserve System to control the money supply because profit-seeking banks tend to make changes in the money supply that are pro-cyclical.
A.
B.
4.  The selling of a government bond by a commercial bank will increase the money supply.
A.
B.
5.  The maximum checkable deposit expansion is equal to excess reserves divided by the monetary multiplier.
A.
B.
6.  A check for $1000 drawn on Bank X by a depositor and deposited in Bank Y will increase the excess reserves in Bank Y by $1000.
A.
B.
7.  A commercial bank seeks both profits and liquidity, but these are conflicting goals.
A.
B.
8.  The reserve of a commercial bank in the Federal Reserve Bank is an asset of the Federal Reserve Bank.
A.
B.
9.  The legal reserve that a commercial bank maintains must equal its own deposit liabilities multiplied by the required reserve ration.
A.
B.
10.  The reason that the banking system can lend by a multiple of its excess reserves, but each individual bank can only lend "dollar for dollar" with its excess reserves, is that reserves lost by a single bank are not lost to the banking system as a whole.
A.
B.
Back to top

Removing ad is a premium feature

Upgrade and get a lot more done!
Take Another Quiz