Ch. 14 How Banks And Thrifts Create Money

10 Questions  I  By Ecofanics
Please take the quiz to rate it.

Finance Quizzes & Trivia
Ch 14 McConnell and Brue.

  
Changes are done, please start the quiz.


Questions and Answers

Removing question excerpt is a premium feature

Upgrade and get a lot more done!
1.  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.
2.  The selling of a government bond by a commercial bank will increase the money supply.
A.
B.
3.  When borrowers from a commercial bank wish to have cash rather than checkable deposits, the money creating potential of the banking system is increased.
A.
B.
4.  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.
5.  Goldsmiths increased the money supply when they accepted deposits of gold and issued paper receipts to the depositors.
A.
B.
6.  A commercial bank may maintain its legal reserve either as a deposit in its Federal Reserve Bank or as government bonds in its own vault.
A.
B.
7.  The Federal funds rate is the interest rate at which the Federal government lends funds to commercial banks.
A.
B.
8.  The maximum checkable deposit expansion is equal to excess reserves divided by the monetary multiplier.
A.
B.
9.  The monetary multiplier is excess reserves divided by required reserves.
A.
B.
10.  The balance sheet of a commercial bank shows the transactions in which the bank has engaged during a given period of time.
A.
B.
Back to top

Removing ad is a premium feature

Upgrade and get a lot more done!
Take Another Quiz
We have sent an email with your new password.