Quiz 3

1. an increase in the monetary base (H)
2. a reduction in the money multiplier
3. an increase in the money multiplier
4. a reduction in H

1. savings accounts
2. bonds
3. checkable deposits
4. loans
5. currency

1. 1/q
2. 1/c
3. 1/(1-c)
4. 1/[c + q (1-c)]
5. [c + q (1-c)]

1. 1/(1 - c)
2. 1/(1- q)
3. 1/c
4. 1 - c
5. 1/q

1. an increase in the monetary base (H).
2. an increase in the money multiplier.
3. a reduction in the money multiplier.
4. a reduction in H.
5. none of the above

1. some of a bank's deposits are money.
2. banks can conduct open market operations on their own.
3. banks do not need to hold reserves against their deposits.
4. banks receive funds and make loans.
5. banks are open longer hours.

1. an increase in income
2. the introduction of credit cards into the economy
3. a decrease in the interest rate
4. all of the above
5. none of the above

1. a reduction in the money multiplier.
2. a reduction in the monetary base (H).
3. an increase in the money supply.
4. an increase in the money multiplier.

1. $150,000
2. $50,000
3. $10,000
4. $100,000

1. the money multiplier is 1/q.
2. H = R.
3. M = D.
4. all of the above

1. an increase in bond prices and an increase in the interest rate (i).
2. a reduction in bond prices and a reduction in i.
3. a reduction in bond prices and an increase in i.
4. an increase in bond prices and a reduction in i.
5. none of the above

1. a reduction in the interest rate
2. an increase in the interest rate
3. an open market purchase of bonds by the central bank
4. an open market sale of bonds by the central bank
5. none of the above

1. checkable deposits
2. money market funds
3. bonds
4. all of the above
5. none of the above

1. an open market sale of bonds
2. an increase in income
3. an open market purchase of bonds
4. none of the above

1. can be used for transactions
2. pay zero interest
3. are sold for a price that varies inversely with the interest rate
4. all of the above
5. none of the above

1. the goods market is also in equilibrium.
2. the price of bonds will tend increase.
3. the supply of bonds also equals the demand for bonds.
4. the price of bonds will tend to fall.
5. production equals demand.

1. an increase in the money multiplier
2. an increase in the monetary base (H)
3. a reduction in the money multiplier
4. a reduction in H

1. a reduction in the supply of central bank money.
2. a reduction in the demand for currency.
3. a reduction in the demand for reserves.
4. all of the above
5. both B and C

1. decreases as income increases.
2. increases as the interest rate increases.
3. decreases as the interest rate increases.
4. none of the above

1. a reduction in the supply of central bank money.
2. a reduction in the demand for reserves.
3. a reduction in the demand for currency.
4. none of the above

1. bills held by the nonbank public
2. checkable deposits
3. coins held by the nonbank public
4. all of the above

1. an increase in H.
2. an increase in the money multiplier.
3. a reduction in the money multiplier.
4. a reduction in the monetary base (H).
5. none of the above

1. 5
2. 4
3. 0.2
4. 1.25
5. 10

1. a leftward shift in the money demand curve and a rightward shift in the money supply curve
2. a rightward shift in the money demand curve and a leftward shift in the money supply curve
3. a rightward shift in the money demand curve and a rightward shift in the money supply curve
4. a leftward shift in the money demand curve and a leftward shift in the money supply curve
5. none of the above

1. a reduction in bond prices and an increase in i.
2. an increase in bond prices and an increase in the interest rate (i).
3. an increase in bond prices and a reduction in i.
4. a reduction in bond prices and a reduction in i.
5. none of the above