ECON 312 Week 6 Quiz

ECON 312 Week 6 Quiz

ECON312 Principles of Economics – DeVry

Question 1.   (TCO 7) If you write a check on a bank to purchase a used Honda Civic, you are using money primarily as

Question 2. (TCO 7) The amount of money reported as M₂

Question 3. (TCO 7) Answer the question on the basis of the following list of assets:

Question 4. (TCO 7) Assume Company X deposits $100,000 in cash in Commercial Bank A.  If no excess reserves exist at the time this deposit is made and the reserve ratio is 20 percent,  Bank A, by itself, can initially increase the money supply by a maximum of

Question 5.  (TCO 7) A bank temporarily short of required reserves may be able to remedy this situation by

Question 6.  (TCO 7) Which of the following is correct?

Question 7.  (TCO 7) The asset demand for money

Question 8. (TCO 7) If the quantity of money demanded exceeds the quantity supplied

Question 9. (TCO 7) Which of the following is not a tool of monetary policy?

Question 10. (TCO 7) In the latter end of 2001 the Fed cut the federal funds rate several times.  The Fed's purpose was to

Question 11. (TCO 7) Explain what is meant by fractional reserve banking. Relate this to money creation and risk to the bank.

Question 12. (TCO 7) Identify the four major instruments of monetary policy.