Question 1. 1. The First National Bank of Oklahoma has checkable deposits of $10

Question

Question 1.1. The First National Bank of Oklahoma has checkable deposits of $10,000,000 and total reserves of $2,500,000; the reserve ratio is 15 percent. What is the most this bank can lend out? (Points : 1)        $500,000
       $750,000
       $1,000,000
       $1,500,000
       The amount cannot be calculated from the information given.? Question 2.2. According to the M1 definition, the money supply consists of currency held by the public plus (Points : 1)        time deposits.
       negotiable certificates of deposit.
       time deposits plus demand deposits.
       demand deposits, NOW accounts, credit union share drafts, and traveler's checks.
       M2 minus money market mutual fund shares. Question 3.3. When the Fed sets an interest rate target, the interest rate that it focuses on specifically is (Points : 1)        the T-bill rate.
       the nominal rate.
       the federal funds rate.
       the prime rate.
       the real rate. Question 4.4. A bank can expand its loans (Points : 1)        provided it has excess reserves.
       until it has no more vault cash.
       as long as someone is willing to borrow.
       provided net worth is positive.
       provided it has fixed assets it can sell. Question 5.5. If the market for money is in equilibrium, then (Points : 1)        the money supply is unaffected by the actions of the Federal Reserve.
       the demand for money is unaffected by the interest rate.
       the demand for money must be equal to the supply of money.
       the demand for money may be greater than the supply of money if velocity is low. Question 6.6. According to most monetarists, the primary goal of monetary policy should be to

(Points : 1)        stabilize the federal funds rate.
       support fiscal policy.
       maintain noninflationary growth of the money supply.
       ensure that the interest rate is low enough to encourage a large amount of investment spending.
       prevent the yields on corporate bonds from falling. Question 7.7. M1 includes all but which one of the following? (Points : 1)        checkable deposits
       currency
       traveler's checks
       coins
       bank CDs Question 8.8. Individuals accept dollars because (Points : 1)        dollars are backed by gold.
       the government says they must.?
       they believe someone else will accept the dollars.
       the Federal Reserve says they must.
       there is no other choice. Question 9.9. In the classical model, the money supply affects the economy (Points : 1)        indirectly through the interest rate.
       by shifting the AS curve.
       directly through spending changes.
       along an AD curve.
       through deficit spending.? Question 10.10. The most important monetary tool of the Federal Reserve System is (Points : 1)        changes in the discount rate.
       changes in legal reserve requirements.
       loans to banks.
       loans to the public.
       open market operations. Question 1.1. The First National Bank of Oklahoma has checkable deposits of $10,000,000 and total reserves of $2,500,000; the reserve ratio is 15 percent. What is the most this bank can lend out? (Points : 1)        $500,000
       $750,000
       $1,000,000
       $1,500,000
       The amount cannot be calculated from the information given.?

Explanation / Answer

$1,000,000 demand deposits, NOW accounts, credit union share drafts, and traveler's checks the federal funds rate provided it has excess reserves the demand for money must be equal to the supply of money maintain noninflationary growth of the money supply bank CDs dollars are backed by gold indirectly through the interest rate changes in the discount rate

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.