Ch. 14 How Banks And Thrifts Create Money

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

  
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1.  A desire by banks to hold excess reserves may reduce the size of the monetary multiplier.
A.
B.
2.  The selling of a government bond by a commercial bank will increase the money supply.
A.
B.
3.  The legal reserve that a commercial bank maintains must equal its own deposit liabilities multiplied by the required reserve ration.
A.
B.
4.  The reserve of a commercial bank in the Federal Reserve Bank is an asset of the Federal Reserve Bank.
A.
B.
5.  Cash held by a bank is sometimes called vault cash.
A.
B.
6.  The balance sheet of a commercial bank shows the transactions in which the bank has engaged during a given period of time.
A.
B.
7.  Modern banking systems use hold as the basis for the fractional reserve system.
A.
B.
8.  The monetary multiplier is excess reserves divided by required reserves.
A.
B.
9.  Goldsmiths increased the money supply when they accepted deposits of gold and issued paper receipts to the depositors.
A.
B.
10.  Mary Lynn, a music star, deposits a $30,000 check in a commercial bank and receives a checkable deposit in return; one hour later the Manford Iron and Coal Company borrows $30,000 from the same bank.  The money supply has increased by $30,000 as a result of the two transactions.
A.
B.
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