1. If money is used as a mechanism to hold purchasing power for a period of time, it isfunctioning as a:a. medium of exchange.b. store of value.c. unit of account.d. standard of value.2. Which of the following is a bank asset?a. certificates of deposit held by the publicb. demand depositsc. savings account depositsd. loans made to customers3. Given the following information about AAA bank:Bank Deposits $100,000Loans $50,000Required Reserves $20,000Excess Reserves $30,000What is the reserve ratio set by the Federal Reserve Bank?a. 10 percent.b. 30 percent.c. 20 percent.d. 50 percent.4. Both increases in the price level and increases in real GDP will increase the demandfor money.a. Trueb. False5. Which set of actions could the Fed use to increase the money supply?I. reduction in the required reserve ratioII. an open market saleIII. a tax cutIV. an open market purchasea. I and II b. I and IIIc. I and IVd. II and IIIe. II and IVBonus Questions:1. Actions by the Federal Reserve to influence the level of GDP are known as:a. cyclical policy.b. monetary policy.c. fiscal policy.d. procyclical policy.2. If the current level of GDP exceeds full employment, the government can reduce thelevel of GDP by:a. increasing spending.b. lowering interest rates.c. reducing taxes.d. reducing the money supply.
This question was answered on: May 23, 2022
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