1.The desired reserve ratio is 3 percent. Robert deposits $3,000 in Bank America. Bank America keeps its minimum desired reserves and lends the excess to Fredrica. How much does Bank America lend to Fredrica?
A. $2,910
B. $300
C. $2700
D. $3,000
E. $900
2. Suppose a price ceiling has no effect; this means that
A. people are finding a way to circumvent the law.
B. it has no legal enforcement mechanism.
C. the equilibrium price is below the price ceiling.
D. the equilibrium price is above the price ceiling.
3. An example of household production excluded from GDP is
A. plumbing work completed by Joe Fix-it.
B. household cleaning services provided by Merry Maids Incorporated.
C. child care provided by a certified nanny.
D. lawn care provided by a local lawn care company.
E. tree trimming you provide at your parents' home.
4.In the United States, between 1961 and 2011, there has been
i. a consistent , non-changing growth rate of potential GDP per person.
ii. an increase in the standard of living based on real GDP per person.
iii. fluctuations in real GDP per person around potential GDP per person.
A. ii only
B. ii and iii
C. i only
D. i and ii only
E. i, ii and iii
5. When goldsmiths issued receipts to gold owners, and those gold receipts circulated while gold stayed in the goldsmiths' safes,
A. the gold receipts were considered money because they were used as a means of payment.
B. an infant banking system developed in sixteenth century Europe.
C. money was invented.
D. fiat money was created.
E. Both A and B are correct.
6.The "double coincidence of wants" is B??
A. what is needed to use money.
B. eliminated when we barter instead of using money.
C. money's role as a unit of account.
D. how value is stored when we transact with money.
E. eliminated with the use of money.
7. The process of money creation by the banking system is limited, in part, by the
A. laws passed each year by the U.S. Congress.
B. number of banks.
C. number of depositors.
D. Comptroller of the Currency.
E. desired reserve ratio.
8. Which of the following is a policy tool of the Fed?
i. setting the required reserve ratios
ii. conducting open market operations
iii. quantitative easing
A. i, ii, and iii
B. Both i and ii
C. i only
D. ii only
E. iii only
