Question 1

Barter is extremely inefficient because:

Accepted Answer

A)   you have to find someone who both has what you want and wants what you have.
B)   it is associated with very high transaction costs.
C)   people and firms have to spend a lot of time looking for mutually agreeable trades.
D)   All of these are true.E) A) and C)
F) A) and D)

Question 2

The M2 classification of money includes:

Accepted Answer

A)   cash and checking account balances.
B)   hard money and savings account balances.
C)   cash, checking account, and savings account balances.
D)   cash, checking accounts, savings accounts, and other financial instruments where money is locked away for a specified period of time.E) All of the above
F) A) and D)

Question 3

Regional Federal Reserve bank presidents are:

Accepted Answer

A)   selected by the Federal Reserve Board of Directors.
B)   allowed to serve no more than two consecutive four-year terms.
C)   responsible for overseeing the day-to-day actions of the regional banks.
D)   responsible for ensuring that the supply of money can adequately meet the demand for money.E) All of the above
F) B) and D)

Question 4

Which of the following statements describes how banks have historically used the discount window?

Accepted Answer

A)   They use it sparingly, because using it often signals that a bank is in financial trouble.
B)   They use it often, because it provides banks with instant access to needed funds.
C)   They use it often, because its low interest rate can serve as a source of profit for banks.
D)   They use it only during times of economic boom, when there is a high demand for loans.E) B) and C)
F) All of the above

Question 5

If the money multiplier is 2, the reserve ratio is:

Accepted Answer

A)   50 percent.
B)   5 percent.
C)   2 percent.
D)   20 percent.E) A) and B)
F) None of the above

Question 6

A bank run occurs when:

Accepted Answer

A)   a large amount of loans held by a bank default at once.
B)   a bank posts a strong series of financial statements.
C)   a bank's reserves are not enough to satisfy all withdrawal demands.
D)   All of these can cause a bank run.E) A) and C)
F) A) and B)

Exam 15: Moneyand the Monetary System

Regional Federal Reserve bank presidents are:

Correct Answer
verified

Barter is extremely inefficient because:

Correct Answer
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A bank run occurs when:

Correct Answer
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Which of the following statements describes how banks have historically used the discount window?

Correct Answer
verified

The M2 classification of money includes:

Correct Answer
verified

If the money multiplier is 2, the reserve ratio is:

Correct Answer
verified

Exam 15: Moneyand the Monetary System

Regional Federal Reserve bank presidents are:

Correct AnswerverifiedShow Answer

Barter is extremely inefficient because:

Correct AnswerverifiedShow Answer

A bank run occurs when:

Correct AnswerverifiedShow Answer

Which of the following statements describes how banks have historically used the discount window?

Correct AnswerverifiedShow Answer

The M2 classification of money includes:

Correct AnswerverifiedShow Answer

If the money multiplier is 2, the reserve ratio is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified