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1. Which of the following both increase the money supply?

an increase in the discount rate and an increase in the interest rate on reserves
an increase in the discount rate and a decrease in the interest rate on reserves
a decrease in the discount rate and an increase in the interest rate on reserves
a decrease in the discount rate and a decrease in the interest rate on reserves

2. In the U.S., the average adult holds about $3,700 in
currency.
wealth.
M1.
M2.
3. The measure of the money stock called M1 includes
wealth held by people in their checking accounts.
wealth held by people in their savings accounts.
wealth held by people in money market mutual funds.
everything that is included in M2 plus some additional items
4. When the Fed decreases the discount rate, banks will
borrow more from the Fed and lend more to the public. The money supply increases.
borrow more from the Fed and lend less to the public. The money supply decreases.
borrow less from the Fed and lend more to the public. The money supply increases.
borrow less from the Fed and lend less to the public. The money supply decreases.
5. Reserve requirements are regulations concerning
the amount banks are allowed to borrow from the Fed.
the amount of reserves banks must hold against deposits.
reserves banks must hold based on the number and type of loans they make.
the interest rate at which banks can borrow from the Fed.
6. When we say that trade is roundabout we mean that
people sometimes trade goods for goods.
trades require a double coincidence of wants.
currency is accepted primarily to make further trades.
people must spend time searching for the products they wish to purchase.
7. Values of Assets

Asset

Amount in $Billions

Small-time deposits

780

Large time deposits

1,700

Demand deposits

450

Other checkable deposits

370

Savings deposits

4950

Traveller's checks

5

Money market mutual funds

740

Currency

880

Miscellaneous categories of M2

50


Refer to Value of Assets. What is the value of M1 in billions of dollars?
1705
2485
6295
7075
8. In 1991, the Federal Reserve lowered the reserve requirement from 12 per cent to 10 per cent. Other things the same this should have
increased both the money multiplier and the money supply.
decreased both the money multiplier and the money supply.
increased the money multiplier and decreased the money supply.
decreased the money multiplier and increased the money supply.
9. Consider four survivors on an island.

Rupert

has machete

wants fishing spear

Amber

has cooking pot

wants fishing spear

Rob

has fishing spear

wants machete

Tom

has cooking pot

wants machete


Which of the following pairs of survivors has a double-coincidence of wants?
Rupert with Amber, and Rob with Tom
Amber with Tom
Rupert with Rob
None of the above is correct.
10. Economists use the term money to refer to

all wealth.
all assets, including real assets and financial assets.
all financial assets, but not real assets.
those types of wealth that are regularly accepted by sellers in exchange for goods and services.

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Insha Fatima
Insha FatimaLv10
28 Sep 2019
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