yesnoWas this paper useful for you? thank you for her participation!

* her assessment is an extremely important for boosting the workof synthetic intelligence, which forms the content of this job




You are watching: If the reserve ratio is 4 percent, then $81,250 of new money can be generated by

*

*

*

*

*



See more: Sons Of Anarchy Season 1 Episode 6, Sons Of Anarchy Recap: Son Summit

Boğaziçi UniversityDepartment that EconomicsSpring 2016EC 102 ethics of MACROECONOMICSProblem collection 6 – answer Key1. Any kind of item that human being can use to carry purchasing strength from the current to the future is calleda. A tool of exchange.b. A unit the account.c. A save of value.d. No one of the above is correct.ANSWER:c2. I m sorry of the following finest illustrates the concept of a store of value?a. You space a precious-metals dealer, and you are constantly aware of how countless ounces the platinum trade foran oz of gold.b. You sell items ~ above eBay, and also your prices are stated in regards to dollars.c. You store 6 ounces of gold in your safe-deposit box at the financial institution for emergencies.d. Nobody of the above is correct.ANSWER:c3. Once we measure and also record financial value, we use money as thea. Liquid asset.b. Tool of exchange.c. Unit that account.d. Store of value.ANSWER:c4. Imagine an economic situation in which: (1) piece of file called dollars room the only thing the buyers give to sellerswhen they buy goods and also services, so it would certainly be common to use, say, 50 dollars to buy a pair the shoes; (2)prices room posted in terms of yardsticks, for this reason you might walk into a grocery store store and see that, today, one appleis precious 2 yardsticks; and also (3) yardsticks disintegrate overnight, therefore no yardstick has any kind of value for an ext than24 hours. In this economy,a. The yardstick is a medium of exchange but it cannot offer as a unit of account.b. The yardstick is a unit that account however it cannot offer as a save of value.c. The yardstick is a tool of exchange however it cannot offer as a save of value, and the yollar is a unit ofaccount.d. The yollar is a unit the account, yet it is not a medium of exchange and also it is no a liquid asset.ANSWER:b5. If an economy uses silver as money, then that economy’s moneya. Serves as a keep of value however not together a medium of exchange.b. Serves as a medium of exchange but not together a unit that account.c. Is commodity money.d. Has no intrinsic value.ANSWER:c6. The major difference between commodity money and also fiat money is thata. Commodity money is a tool of exchange yet fiat money is not.b. Fiat money is a medium of exchange but commodity money is not.c. Commodity money has actually intrinsic value however fiat money go not.d. Fiat money has intrinsic value but commodity money go not.ANSWER:c7. I beg your pardon of the following is not had in M1?a. Currencyb. Demand depositsc. Savings depositsd. Traveler"s checksANSWER:c8. Which of the following statements is correct?a. All items that are had in M1 room included also in M2.b. Every items the are had in M2 are included likewise in M1.c. Credit cards are had in both M1 and M2.d. Save deposits are consisted of in both M1 and also M2.ANSWER:a9. Money industry mutual accumulation are contained ina. M1 however not M2.b. M1 and M2.c. M2 however not M1.d. Neither M1 nor M2.ANSWER:c10. An open-market purchasea. Rises the variety of dollars and the number of bonds in the hand of the public.b. Rises the variety of dollars in the hand of the public and also decreases the variety of bonds in thehands of the public.c. Reduce the variety of dollars and also the number of bonds in the hand of the public.d. Decreases the number of dollars in the hands of the public and also increases the variety of bonds in thehands of the public.ANSWER:b11. In a system of 100-percent-reserve banking,a. Financial institutions do not accept deposits.b. Financial institutions do not affect the it is provided of money.c. Loans are the just asset item because that banks.d. All of the over are correct.ANSWER:b12. Financial institutions are able to develop money only whena. Interest rates are over 2%.b. The Fed sell U.S. Federal government bonds.c. The reserve proportion is 100%.d. Just a portion of deposits are held in reserve.ANSWER:d13. Mean the bank system right now has $400 billion in reserves, the reserve necessity is 8 percent, andexcess reserves amount to $5 billion. What is the level the deposits?a. $5,000 billionb. $4,937.5 billionc. $5,062.5 billiond. $4,995 billionANSWER:b14. If a financial institution that desire to host no overabundance reserves and has just sufficient reserves to meet the forced reserveratio of 15 percent obtain a deposit the $600, it has aa. $600 rise in overabundance reserves and also no rise in forced reserves.b. $600 rise in forced reserves and no increase in overabundance reserves.c. $510 rise in overfill reserves and a $90 rise in compelled reserves.d. $90 increase in overabundance reserves and also a $510 boost in compelled reserves.ANSWER:c15. A bank has an 8 percent to make reservation requirement, $10,000 in deposits, and also has loaned out all that can provided thereserve requirement.a. It has $80 in reserves and $9,920 in loans.b. It has $800 in reserves and $9,200 in loans.c. It has $1,250 in reserves and also $8,750 in loans.d. Nobody of the over is correct.ANSWER:b16. The manager the the financial institution where you occupational tells you that your financial institution has $6 million in overabundance reserves. She alsotells you the the financial institution has $400 million in deposits and also $362 million dollars in loans. Given this info youfind the the make reservation requirement need to bea. 44/400.b. 6/362.c. 38/400.d. 32/400.ANSWER:d17. Suppose the bank system right now has $300 billion in reserves, the reserve requirement is 5 percent, andexcess reserves room $30 billion. What is the level that loans?a. $270 billionb. $5,400 billionc. $6,000 billiond. $5,100 billionANSWER:b18. If the reserve requirement is 12 percent and banks desire to organize no excess reserves, when a financial institution receives anew deposit that $1,000,a. It must rise its compelled reserves by much more than $150.b. Its full reserves initially rise by $120.c. That will be able to make brand-new loans approximately a best of $880.d. None of the above is correct.ANSWER:c19. Expect the Fed requires banks to organize 9 percent of your deposits as reserves. A bank has $18,000 that excessreserves and also then selling the Fed a Treasury bill for $9,000. Just how much walk this financial institution now need to lend out if itdecides to hold only compelled reserves?a. $27,000b. $27,190c. $26,190d. $9,000ANSWER:a20. The money multiplier equalsa. 1/R, whereby R represents the quantity of reserves in the economy.b. 1/R, where R represents the reserve proportion for all banks in the economy.c. 1/(1+R), wherein R represents the quantity of make reservation in the economy.d. 1/(1+R), whereby R represents the reserve proportion for all banks in the economy.ANSWER:b21. I beg your pardon of the adhering to statements is correct? In the special instance of the 100-percent reserve bank themoney multiplier isa. 0 and banks create money.b. 0 and also banks carry out not develop money.c. 1 and banks develop moneyd. 1 and also banks do not develop money.ANSWER:d22. If the reserve ratio is 5 percent, then $500 of added reserves can develop up toa. $10,500 of brand-new money.b. $10,000 of brand-new money.c. $9,500 of new money.d. $2,500 of brand-new money.ANSWER:b23. If the reserve ratio is 20 percent, climate $100 of new reserves have the right to generatea. $60 of new money in the economy.b. $250 of new money in the economy.c. $500 of brand-new money in the economy.d. $2,000 of new money in the economy.ANSWER:c24. If the reserve ratio is 4 percent, then $81,250 of brand-new money have the right to be created bya. $325 of brand-new reserves.b. $3,250 of brand-new reserves.c. $20,312.50 of brand-new reserves.d. $2,031,250 of new reserves.ANSWER:b25. In the country of Wiknam, the money supply is $80,000 and also reserves space $18,000. Assuming that people holdonly deposits and no currency, and also that banks hold no overfill reserves, climate the reserve requirement isa. 29 percent.b. 22.5 percent.c. 16 percent.d. Nobody of the above is correct.ANSWER:bTable 1.Bank of PleasantvilleAssetsReservesLoans$3,00047,000DepositsLiabilities$50,00026. Describe Table 1. Indigenous the table it adheres to that the financial institution of Pleasantville operates in aa. Fractional-reserve bank system, because its make reservation are much less than the deposits.b. Fractional-reserve banking system, due to the fact that its make reservation are less than that is loans.c. 100-percent-reserve bank system, since its assets space equal come its liabilities.d. 100­percent­reserve banking system if the Fed’s reserve requirement is 10 percent; otherwise, itoperates in a fractional-reserve banking system.ANSWER:a27. Describe Table 1. The bank of Pleasantville’s reserve ratio isa. 6.4 percent.b. 16.7 percent.c. 6.0 percent.d. 15.7 percent.ANSWER:c28. Refer to Table 1. Assume there is a make reservation requirement and also the financial institution of Pleasantville is precisely incompliance v that requirement. Assume the very same is true because that all various other banks. Lastly, assume people hold onlydeposits and also no currency. What is the money multiplier?a. 6b. 16.7c. 15.6d. 6.4ANSWER:b29. Refer to Table 1. If the Fed’s reserve necessity is 5 percent, climate what amount of excess reserves doesthe financial institution of Pleasantville currently hold?a. $500b. $250c. $2,000d. $3,600ANSWER:a30. Describe Table 1. Assume the Fed’s reserve need is 5 percent and all financial institutions besides the bank ofPleasantville are specifically in compliance with the 5 percent requirement. More assume that world hold onlydeposits and also no currency. Starting from the situation as illustrated by the T-account, if the financial institution of Pleasantvilledecides come make brand-new loans so regarding end up with no excess reserves, climate by how much go the money supplyeventually increase?a. $10,833.33.b. $13,000.c. $8,333.33.d. $10,000.ANSWER:d31. If the CB sells government bonds come the public, climate reservesa. Increase and also the money supply increases.b. Increase and the money it is provided decreases.c. Decrease and also the money supply increases.d. Decrease and also the money supply decreases.ANSWER:d32. Once the Fed purchases $1000 precious of government bonds indigenous the public, the U.S. Money it is provided eventuallyincreases bya. Much more than $1000.b. Precisely $1000.c. Much less than $1000.d. None of the over are correct.ANSWER:a33. If the money multiplier is 3 and the Fed buys $50,000 worth of bonds, what wake up to the money supply?a. It rises by $100,000b. It rises by $150,000c. It decreases by $100,000d. That decreases by $200,000ANSWER:b34. As soon as the Fed decreases the discount rate, banks willa. Borrow much more from the Fed and also lend much more to the public. The money it is provided increases.b. Borrow an ext from the Fed and also lend much less to the public. The money supply decreases.c. Borrow much less from the Fed and lend much more to the public. The money supply increases.d. Borrow much less from the Fed and also lend less to the public. The money supply decreases.ANSWER:a35. Reserves increase if the commonwealth Reservea. Raises the discount price or auctions an ext credit.b. Raises the discount rate yet not if the auctions more credit.c. Lowers the discount price or auctions an ext credit.d. Lowers the discount rate however not if the auctions more credit.ANSWER:c36. I beg your pardon of the following both increase the money supply?a. An increase in the discount price and an increase in the interest price on reservesb. Rise in the discount rate and a to decrease in the interest price on reservesc. A decrease in the discount rate and boost in the interest price on reservesd. A decrease in the discount rate and also a diminish in the interest price on reservesANSWER:d37. In a fractional-reserve banking system, an increase in reserve requirementsa. Boosts both the money multiplier and also the money supply.b. Decreases both the money multiplier and the money supply.c. Boosts the money multiplier, but decreases the money supply.d. To reduce the money multiplier, but increases the money supply.ANSWER:b38. Other things the same, if reserve requirements are increased, the make reservation ratioa. Increases, the money multiplier increases, and also the money supply increases.b. Increases, the money multiplier decreases, and the money supply decreases.c. Decreases, the money multiplier increases, and the money it is provided increases.d. Decreases, the money multiplier decreases, and the money supply increases.ANSWER:b39. The manager of the bank where you job-related tells you the the financial institution has $300 million in deposits and $255 milliondollars in loans. If the reserve requirement is 8.5 percent, how much is the financial institution holding in overabundance reserves?a. $15 millionb. $19.5 millionc. $25.5 milliond. $0 millionANSWER:b40. The money it is provided decreases if the Feda. Selling Treasury bonds. The bigger the to make reservation requirement, the bigger the decrease will certainly be.b. Sells Treasury bonds. The smaller sized the make reservation requirement, the bigger the decrease will be.c. Buys Treasury bonds. The larger the to make reservation requirement, the bigger the decrease will be.d. Buys Treasury bonds. The smaller the to make reservation requirement, the bigger the decrease will be.ANSWER:b41. Once the price level rises, the number of dollars needed to purchase a representative basket that goodsa. Increases, and also so the value of money rises.b. Increases, and also so the value of money falls.c. Decreases, and so the value of money rises.d. Decreases, and so the value of money fallsANSWER:b42. When inflation rises human being willa. Demand much more money so the price level rises.b. Demand an ext money so the price level falls.c. Need less money so the price level rises.d. Demand less money therefore the price level falls.ANSWER:c43. If ns denotes the price that goods and also services measure up in terms of money, thena. 1/P to represent the worth of money measured in regards to goods and also services.b. P have the right to be concerned as the “overall price level.”c. An increase in the value of money is connected with a decrease in P.d. Every one of the over are correct.ANSWER:d44. The it is provided of money rises whena. The price level falls.b. The interest rate increases.c. The CB provides open-market purchases.d. Money need increases.ANSWER:c45. As the price level decreases, the value of moneya. Increases, so civilization must organize less money to purchase goods and services.b. Increases, so people must hold much more money to purchase goods and services.c. Decreases, so civilization must hold much more money to purchase goods and services.d. Decreases, so civilization must hold less money to purchase goods and services.ANSWER:a46. When the money industry is drawn with the value of money on the upright axis, together the price level increases,the worth of moneya. Increases, so the amount of money inquiry increases.b. Increases, for this reason the amount of money inquiry decreases.c. Decreases, for this reason the quantity of money demanded decreases.d. Decreases, therefore the amount of money inquiry increases.ANSWER:d47. As soon as the money sector is drawn with the value of money ~ above the vertical axis, if the price level is belowthe equilibrium level, there is ana. Excess demand for money, so the price level will certainly rise.b. Excess need for money, for this reason the price level will certainly fall.c. Excess supply of money, so the price level will rise.d. Excess it is provided of money, therefore the price level will certainly fall.ANSWER:c48. A to decrease in the money supply creates an excessa. It is provided of money that is removed by increasing prices.b. It is provided of money that is eliminated by fallout’s prices.c. Need for money the is removed by rising prices.d. Demand for money the is removed by fallout’s prices.ANSWER:d49. Once the money market is drawn with the value of money on the vertical axis, if the federal Reserve buysbonds, then the money supply curvea. Shifts rightward, bring about the value of money measured in regards to goods and also services to rise.b. Shifts rightward, resulting in the worth of money measure up in terms of goods and also services to fall.c. Move leftward, bring about the worth of money measured in regards to goods and also services to rise.d. Shifts leftward, leading to the worth of money measured in regards to goods and also services to fall.ANSWER:b50. On a given morning, Franco sold 40 pairs of shoes because that a full of $80 at his shoes store.a. The $80 is a actual variable. The quantity of shoes is a in the name of variable.b. The $80 is a nominal variable. The amount of pair of shoes is a actual variable.c. Both the $80 and the amount of shoes are nominal variables.d. Both the $80 and the amount of pair of shoes are actual variables.ANSWER:b51. Once shopping you notification that a pair that jeans costs $20 and that a tee-shirt expenses $10. Friend compute the priceof jeans loved one to tee-shirts.a. The dollar price the jeans and also the loved one price the jeans are both in the name of variables.b. The dissension price that jeans and also the family member price the jeans space both real variables.c. The disagreement price of blue jeans is a nominal variable; the loved one price of jeans is a genuine variable.d. The dollar price of jeans is a genuine variable; the loved one price of blue jeans is a in the name variable.ANSWER:c52. Her nominal wage boosts from $12 per hour to $13 every hour. At the very same time, the price level increasesfrom 140 come 147. Together a result,a. The variety of dollars you get increases and also the purchasing strength of the dollars girlfriend receiveincreases.b. The number of dollars you obtain increases and the purchasing strength of the dollars friend receivedecreases.c. The variety of dollars you get decreases and also the purchasing power of the dollars friend receiveincreases.d. The variety of dollars you receive decreases and also the purchasing power of the dollars girlfriend receivedecreases.ANSWER:a53. Transforms in in the name of variables are identified mostly by the amount of money and the financial systemaccording toa. Both the classic dichotomy and also the quantity theory that money.b. The timeless dichotomy, but not the amount theory the money.c. The amount theory that money, but not the classic dichotomy.d. Neither the timeless dichotomy no one the quantity theory that money.ANSWER:a54. The velocity the money isa. The rate at i beg your pardon the Fed place money into the economy.b. The very same thing together the long-term expansion rate that the money supply.c. The money supply separated by in the name GDP.d. The average number of times per year a dollar is spent.ANSWER:d55. If M = 3,000, p = 2, and also Y = 6,000, what is velocity?a. 1/4b. 2c. 4d. 1ANSWER:c56. If M = 12,000, ns = 3, and Y = 32,000, then velocity =a. 1.125. Velocity will rise if money alters hands more frequently.b. 1.125. Velocity will increase if money changes hands much less frequently.c. 8. Velocity will climb if money transforms hands an ext frequently.d. 8. Velocity will increase if money changes hands less frequently.ANSWER:c57. If velocity = 4, the amount of money = 20,000, and the price level = 2.5, then the genuine value of calculation isa. 2,000.b. 200,000.c. 12,500.d. 32,000.ANSWER:d58. According to the presumptions of the amount theory the money, if the money supply boosts by 5 percent,thena. Nominal and also real GDP would rise by 5 percent.b. In the name of GDP would increase by 5 percent; real GDP would be unchanged.c. In the name GDP would certainly be unchanged; actual GDP would climb by 5 percent.d. No nominal GDP nor genuine GDP would certainly change.ANSWER:b59. The money it is provided in Muckland is $100 billion. In the name of GDP is $800 billion and real GDP is $200 billion. Whatare the price level and velocity in Muckland?a. The price level and velocity are both 8.b. The price level is 2 and velocity is 8.c. The price level and velocity are both 4.d. The price level is 4 and also velocity is 8.ANSWER:d60. Various other things the same, a to decrease in velocity way thata. The price at i m sorry money transforms hands falls, so the price level rises.b. The price at which money transforms hands falls, for this reason the price level falls.c. The rate at i beg your pardon money alters hands rises, so the price level rises.d. The rate at which money alters hands rises, for this reason the price level falls.ANSWER:b61. Intend the money it is provided tripled, but at the very same time velocity doubled and real GDP was unchanged.According to the amount equation the price levela. Is 1.5 time its old value.b. Is 3 times its old value.c. Is 6 time its old value.d. Is the same as that is old value.ANSWER:c62. I m sorry of the complying with is no implied through the amount equation?a. If velocity is stable and money is neutral, an increase in the money it is provided creates a proportionalincrease in in the name output.b. If velocity is stable and money is neutral, boost in the money it is provided creates a proportionalincrease in the price level.c. With continuous money supply and also output, boost in velocity creates rise in the price level.d. With constant money supply and velocity, an increase in output creates a proportional rise in theprice level.ANSWER:d63. The case that rises in the growth rate of the money supply rise nominal attention rates yet not realinterest rates is recognized as thea. Friedman Effect.b. Hume Effect.c. Fisher Effect.d. The inflation tax.ANSWER:c64. The inflation taxa. Is an alternative to earnings taxes and also government borrowing.b. Taxes many those who host the many money.c. Is the revenue produced when the federal government prints money.d. All of the above are correct.ANSWER:d65. Under the presumptions of the Fisher effect and also monetary neutrality, if the money supply expansion rate falls, thena. Both the nominal and also the real interest rate fall.b. Neither the nominal no one the real interest price fall.c. The in the name interest rate falls, however the genuine interest price does not.d. The genuine interest price falls, however the in the name interest price does not.ANSWER:c66. Suppose that financial neutrality and also the Fisher impact both hold. An increase in the money supply growth rateincreasesa. The inflation rate and growth of real GDP.b. The inflation rate but not the expansion rate of genuine GDP.c. The growth rate of real GDP, but not the inflation rate.d. Neither the inflation rate nor the expansion rate of actual GDP.ANSWER:b