15) The formula that links checkable deposits to the monetary base is
1A) m = .
r ?e ? c1B) M = .
r ?e ? c1C) M = .
r ?e ? c1D) D = .
r ?e ? c1E) D = × MB.
r ?e ? cAnswer: E
Ques Status: Previous Edition
16) The formula that links checkable deposits to the money supply is
l ? cA) M = .
D1B) M = × D.
1 ? c1C) D = × M.
1 ? cD) D = (1 + c) × M. Answer: C
Ques Status: Previous Edition
17) The formula for the M1 money multiplier is A) m = (1 + c)/(r + e + c). B) M = 1/(r + e + c).
C) M = (1 + c)/(r + e + c). D) m = [1/(r + e + c)] × MB. Answer: A
Ques Status: Previous Edition
18) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the money supply is ________ billion. A) $8000 B) $1200 C) $1200.8 D) $8400 Answer: B
Ques Status: Revised
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19) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the M1 money multiplier is A) 2.5. B) 1.67. C) 2.0. D) 0.601. Answer: A
Ques Status: Previous Edition
20) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the currency ratio is A) 0.25. B) 0.50. C) 0.40. D) 0.05. Answer: B
Ques Status: Previous Edition
21) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the excess reserves-checkable deposit ratio is A) 0.001. B) 0.10. C) 0.01. D) 0.05. Answer: A
Ques Status: Previous Edition
22) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the monetary base is A) $480 billion. B) $480.8 billion. C) $80 billion. D) $80.8 billion. Answer: B
Ques Status: Previous Edition
23) If the required reserve ratio is 15 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the M1 money multiplier is A) 2.5. B) 1.67. C) 2.3. D) 0.651. Answer: C
Ques Status: Previous Edition
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24) If the required reserve ratio is 5 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the M1 money multiplier is A) 2.5. B) 2.72. C) 2.3. D) 0.551. Answer: B
Ques Status: Previous Edition
25) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the money supply is ________ billion. A) $10,000 B) $4000 C) $1400 D) $10,400 Answer: C
Ques Status: Revised
26) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the M1 money multiplier is A) 2.5. B) 2.8. C) 2.0. D) 0.7. Answer: B
Ques Status: Previous Edition
27) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the currency ratio is A) 0.25. B) 0.50. C) 0.40. D) 0.05. Answer: C
Ques Status: Previous Edition
28) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the excess reserves-checkable deposit ratio is A) 0.01. B) 0.10. C) 0.001. D) 0.05. Answer: C
Ques Status: Previous Edition
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29) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the monetary base is A) $400 billion. B) $401 billion. C) $500 billion. D) $501 billion. Answer: D
Ques Status: Previous Edition
30) If the required reserve ratio is 15 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the M1 money multiplier is A) 2.54. B) 2.67. C) 2.35. D) 0.551. Answer: A
Ques Status: Previous Edition
31) If the required reserve ratio is one-third, currency in circulation is $300 billion, and checkable deposits are $900 billion, then the money supply is ________ billion. A) $2700 B) $3000 C) $1200 D) $1800 Answer: C
Ques Status: Revised
32) If the required reserve ratio is one-third, currency in circulation is $300 billion, and checkable deposits are $900 billion, then the M1 money multiplier is A) 2.5. B) 2.8. C) 2.0. D) 0.67. Answer: C
Ques Status: Previous Edition
33) If the required reserve ratio is one-third, currency in circulation is $300 billion, and checkable deposits are $900 billion, then the currency ratio is A) 0.25. B) 0.33. C) 0.67. D) 0.375. Answer: B
Ques Status: Previous Edition
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34) If the required reserve ratio is one-third, currency in circulation is $300 billion, and checkable deposits are $900 billion, then the level of excess reserves in the banking system is A) $300 billion. B) $30 billion. C) $3 billion. D) 0.
Answer: D
Ques Status: Previous Edition
35) If the required reserve ratio is one-third, currency in circulation is $300 billion, and checkable deposits are $900 billion, then the monetary base is A) $300 billion. B) $600 billion. C) $333 billion. D) $667 billion. Answer: B
Ques Status: Previous Edition
36) Everything else held constant, an increase in the required reserve ratio on checkable deposits will cause
A) the money supply to rise.
B) the money supply to remain constant. C) the money supply to fall. D) checkable deposits to rise. Answer: C
Ques Status: Previous Edition
37) Everything else held constant, a decrease in the required reserve ratio on checkable deposits will mean
A) a decrease in the money supply. B) an increase in the money supply. C) a decrease in checkable deposits. D) an increase in discount loans. Answer: B
Ques Status: Previous Edition
38) Everything else hed constant, an increase in the required reserve ratio on checkable deposits causes the M1 money multiplier to ________ and the money supply to ________. A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease Answer: C
Ques Status: Previous Edition
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