To use monetary policy to lessen the effects of a recession, the Federal Reserve would:
increase the money supply and increase interest rates
decrease the money supply and increase interest rates
increase the money supply and decrease interest rates
decrease the money supply and decrease interest rates
Federal Reserve Notes in the Us are:
commodity money
fiat money
specie money
regulated money
When the USA was founded, the official monetary system was based on:
gold and silver
silver only
gold only
gold, silver, and/or paper as determined by Congress
Prior to the Civil War, US banks could print paper money, the government could not.
Some countries in Central America, South America, and Africa use the US dollar their currency and no longer print their own,
It is called a if a country issues its money backed by dollars or yen.
Which of the following is not one of the functions of money?
medium of exchange
insurer of commodities
store of value
unit of account
When David Hume said that money was the oil of trade, he meant which function of money?
Medium of exchange
Insurer of commodities
Store of valie
Unite of Account
An economic system without money is a system.
In the book the Wonderful Wizard of Oz, the author supports:
bimetallism
the gold standard
reserve currencies
Which of the following is false about the Wonderful Wizard of Oz?
The yellow brick road is the gold standard
The scarecrow represents farmers
Dorothy's slippers are made of silver in the original story
The tin woodsman represents Wall Street
The Wonderful Wizard of Oz is about the presidential election of 1896.
In the Wonderful Wizard of Oz the wizard is the president of the US.
In a fractional reserve banking system, banks must keep:
a % of their of their loans on reserve in the bank
a % of their deposits on reserve in the bank
a set dollar amount on reserve in the bank, based on their size
a percentage of their average daily transactions on reserve in the bank
The Federal Reserve was founded in 1913. It is the first central bank the US has ever had, while most of the central banks in Europe are hundreds of years old.
The Fed is divided into Districts because:
it is more efficient to issue currency that way due to the size of the country
separate districts can better adapt to local economic conditions
too many states wanted the Fed located there, so having 12 was a political compromise
Katniss Everdeen decided
In today's financial system, the value of our money depends only on our in it, according to your professor.
The Fed decreases the money supply by bonds.
The Federal Reserve is intended to be independent of the President and Congress.
When the Fed increases the money supply, interest rates should:
fall
rise
remain inchanged
The rate is what the Fed charges banks when they borrow from it.
The rate is what US banks are charged for overnight loans.
The is the European version of the previous question.
Most of the money in the world is:
cash printed by the government
created by banks when they make loans
created through printing bonds
created by banks taking deposits
A credit default swap is actually an insurance policy on a financial asset.
M1 is mainly:
cash and coins
currency and checking accounts
currency, checking accounts, and small savings and time deposits
a freeway in London
If Bill's bank is the only bank, it can legally make a loan of $50000. That is, it's accounts will still balance legally after the loan is made.
When the interest rate rises, investment should do what?
be unchanged
The modern theory of economic growth is based on _____ as the key to growth.
savings
ideas and innovations
infrastructure investment
banking reform
The size of a country's _____ relative to its population tells us how rich it is.
bank reserves
capital stock
financial markets
exports
According to the United Nations, what is the biggest obstacle to economic development for poor nations in the world today?
too much debt
treatment of women
child labor
poor transportation systems
Despite the theories, the quantity of natural resources a country has turns out to be the most important factor to its economic growth in the real world.
When the government uses its taxing and spending powers to affect the economy, it is called:
monetary policy
congressional policy
financial policy
fiscal policy
Open Market operations are
the buying and selling of government bonds by the Federal Reserve
the means by which the Federal Reserve acts as the government's banker
the buying and selling of Federal Reserve Notes in the open market
the buying and selling of government bonds by the Treasury
When the government of Japan targeted its automobile companies as a way to make the economy grow, this was called _____ policy.
fiscal
regional
industrial
referntial
In the current economic crisis, a Classical economist would have done what with the failing banks and insurance companies?
let them go bankrupt, regardless of effect on anything else
let them go bankrupt, with the Fed protecting other financial institutions affected by it
forced another financial institution to buy them, with help from the Fed
exactly what the Fed did, buy billions in their stock to increase their reserves
Keynesians believe that the best way to end a recession is:
increase the money supply and lower interest rates
increase government spending and make tax cuts
raise interest rates and cut taxes
do nothing
When lowering interest rates dows not affect the economy, economists say we are in a(n):
functional deficit
liquidity trap
crowding out
transitional lag
Correctly measured the US national debt:
is larger than it has ever been
has increased under every president since 1900, except Clinton
is smaller than Japan's
b and c only
a,b, and c are all correct
The last US president who did not have a budget deficit was:
Reagan
Kennedy
Jackson
Clinton
Almost all money in the world today is _____ money
commodity
fiat
contractual
An economic system without money is a(n) system.
The central bank increases the money supply by bonds.
The Fed is divided into 12 districts which are supposed to:
simplify the Fed's accounting
each contain 1/12 of the population, creating a monetary "congress"
represent the unique economic interests of different parts of the country
all members of congress to appoint those who their local economy
Most of the money is the world is:
The entity intended to be the central bank for the world is the:
ECB
IMF
World Bank
Wynn Resorts
When the entity in the previous question make a loan to a country, it requires a(n) _____ program in exchange
re-invigoration
austerity
spending
The changes made to US currency have been made to:
lengthen the time the money is used in circulation
prevent couterfeiting
lower the costs of printing
b and c
M2 consists of the , , and .
The Act separated banking and stock brokers. It has since been repealed.
Congress in 1999 passed a law which prohibited the government from creating rules that regulated mortgage backed securities.
When lowering interest rates does not affect the economy, economists say that we are in a(n) .
It is called when the government's borrowing to pay for something like the stimulus package makes interest rates go up, and lessons private borrowing.
Data tell us that changing taxes has the strongest effect on the economy when times are good, and less effect as times go bad.
Banks in the US in the 1800s were generally allowed to print their own money.
The approval that a bank must have to be allowed to operate is called a(n) .
Bill's Bank has $5,000 in cash, $10,000 in loans, and $40,000 in deposits. Its actual reserves are:
$10,000
$4,000
$40,000
$5,000
Bill's Bank has $5,000 in cash, $10,000 in loans, and $40,000 in deposits. It requires reserves, assuming 10% reserve requirement, are:
$1,000
Bill's Bank has $5,000 in cash, $10,000 in loans, and $40,000 in deposits. Its excess reserves, assuming 10% reserve requirement, are:
$0
$2,000
Bill's Bank has $5,000 in cash, $10,000 in loans, and $40,000 in deposits. It can make a $5,000 loan and remain legal, assuming a 10% reserve requirement.
