Ch. 14 How Banks And Thrifts Create Money

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

Money 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 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.
2.  The maximum checkable deposit expansion is equal to excess reserves divided by the monetary multiplier.
A.
B.
3.  Goldsmiths increased the money supply when they accepted deposits of gold and issued paper receipts to the depositors.
A.
B.
4.  The selling of a government bond by a commercial bank will increase the money supply.
A.
B.
5.  The actual reserves of a commercial bank equal excess reserves plus required reserves.
A.
B.
6.  If the banking system has $10 million in excess reserves and if the reserve ratio is 25%, the system can increase its loans by $40 million.
A.
B.
7.  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.
8.  A desire by banks to hold excess reserves may reduce the size of the monetary multiplier.
A.
B.
9.  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.
10.  A commercial bank seeks both profits and liquidity, but these are conflicting goals.
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.