Multiple choice

1. What is produced and exchanged in the real sector? 

Money

Goods and services

Financial assets

All assets with a money price

2. The short-term interest rate is determined in the: 

loanable funds market.

stock market.

exchange rate market.

money market.

3. A reserve ratio of 0.10 means that a bank can lend an amount equal to: 

10 percent of its deposit liabilities.

10 percent of its excess reserves.

90 percent of its deposit liabilities.

90 percent of its excess reserves.

4. If the Fed printed too much money, the relative price of money would: 

fall, and the money price of goods would rise.

rise, and the money price of goods would fall.

fall, and the money price of goods would fall.

rise, and the money price of goods would rise.