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Checkable deposits are money because they are...
flat money
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What type of financial institution accepts deposits from and lends to "members," who are usually a group of people who work for the same company?
credit unions
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Which constitutes the largest element in the M 2 money supply?
savings deposits
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The major components of the money supply—paper money and checkable deposits—are
debts or promises to pay
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Which best describes the backing of money in the United States?
the belief of holders of money that it can be exchanged for desirable goods and services
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To keep the purchasing power of money fairly stable, the Federal Reserve
controls the money supply
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The fractional reserve system of banking started when goldsmiths began...
issuing paper money in excess of the amount of gold stored with them
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The claims of the owners of the bank against the bank's assets is the bank's
net worth
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The primary reason commercial banks must keep required reserves on deposit at Federal Reserve Banks is to
provide the Fed with a means of controlling the lending ability of the commercial bank
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A depositor places $750 in cash in a commercial bank, and the reserve ratio is 33.33%; the bank sends the $750 to the Federal Reserve Bank. As a result, the actual reserves and the excess reserves of the bank have been increased, respectively, by
$750 and $500
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If the required reserve ratio were 12.5%, the value of the monetary multiplier would be
8
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The commercial banking system has excess reserves of $700, makes new loans of $2,100, and is just meeting its reserve requirements. The required reserve ratio is
33.33%
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