ECON 1BB3 Final: Macroeconomics Review C10

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beigebadger693

8 Mar 2017

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ECON 1BB3 Full Course Notes

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The meaning of money: money is the set of assets in an economy that people regularly use to buy goods and services from other people. M=c+d: m1 is demand deposits/currency and m2 is deposits (saving/term) The bank of canada: the bank of canada is the central bank of canada, established in 1935, a central bank is an institution designed to regulate the quantity of money in the economy. The bank of canada act: the bank of canada is managed by a board of directors composed of the governor, the senior deputy governor, and 12 directions, including the deputy minister of. Dominion bank, the canadian imperial bank of commerce, and the bank of nova. Money creation with fractional-reserve banking fractional-reserve banking is a banking system in which banks hold a fraction of deposits as reserves: reserve ratio is the fraction of deposits that banks hold as reserves.

Related Questions

A property right is

		A social arrangement that governs the ownership, use, and disposal of anything that people value.
		An economical unit that hires production factors and organizes those factors to produce and sell goods and services.
		Any arrangement that enables buyers and sellers to get information and to do business with each other.
		Any commodity or token that is generally accepted as a means of payment.
		A medium of exchange.

cyantermite905

Money is often used to purchase items in society, but bartering was common in the past. Bartering is the trading of one good or service for another good or service.

Explain your experiences with bartering. List at least 1 advantage and 1 disadvantage to bartering.

Most developed countries in the world use flat money. This means that their money is not backed by gold or silver. The value is related to only the faith in the country that backs it. The US has used flat money since the 1970s.

Why do you think most developed countries use flat money? Would it be practical to switch back to a commodity (like gold or silver) backed money system? Why or why not?

Use at least two of the following terms in your answer: Asset

Flat Money

Store of value

Unit of account

Medium of exchange

lavenderkoala678

Question 2 (3 points) If an individual bank receives $100,000 in new deposits and the required reserve ratio is 10 percent, the bank must keep the following amount of required reserves with the Fed?

$90,000.

$1,000,000. '

Zero.

$10,000.

Question 3 (3 points) Assume that the Fed purchases $10 million in bonds from a bank, the monetary base will:

Increase by $10 million.

Remain unchanged.

Decrease by $10 million.

Increase by $5 million.

Question 4 (3 points) When we say that money has a function as a medium of exchange, this implies that:

Money must be in the form of a precious metal such as gold.

Money must be set at a fixed exchange rate in international currency markets.

Money is backed by the gold standard.

Money is used to purchase goods and services rather than resorting to barter.

Question 5 (3 points) Which of the following is not considered an asset for a bank:

Customer deposits.

U.S. government treasury bills.

Corporate loans.

U.S. government-issued debt.

amberbeaver601

ECON 1BB3 Final: Macroeconomics Review C10

ECON 1BB3 Full Course Notes

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