TE 1. The uses of money are: Medium of exchange, store value, and standard of va
ID: 1121087 • Letter: T
Question
TE 1. The uses of money are: Medium of exchange, store value, and standard of value IE 2. Money is defined as anything accepted as a medium of exchange TE 3. Money supply is designated MI which includes currency in circulation transaction account balances, travelers' checks. Currency in circulation outside of bank vaults 4. M2 money supply, MI plus, most savings accounts balances and money mutual funds 5. M3 money supply is the largest of all ransaction accounts and most widely used by IE T E TE 6. To understand the origins of our money supply one must recognize two basic TE 7. Banks deposit creation activities ae regulated by local, state governments the public. principles, transaction account balances the process for making loans TE The essential functions of a bank are to accept deposits, offer draft (check writing 8. privileges) and make loans. Most banks are in business for your convenience. Banks are typically classified into four distinct categories: Commercial Banks, Saving TE 9. TE 10. and Loan Association, Mutual Savings banks, and Credit Unions. TE Required reserves: the minimum amount of reserves a bank is required to hold: 11. equal to required reserve ratio times transaction deposits. TE 12. Excess reserves are reserves a bank is required to hold for loan creation. E 13. The creation of transaction deposits via new loans is the same thing as creating money The money multiplier: the number of deposit (loan) dollars that the banking s can create from $1.00 dollar of excess reserves: equal to $1.00 divided by rese E 14. ratio. Each bank may lend an amount equal to its excess reserves and no more; the banking system can increase the volume of loans by the amount of excess re E 15. multiplied by the money multiplier.Explanation / Answer
TRUE Statement is correct TRUE Statement is correct TRUE Definition is correct TRUE Definition is correct TRUE Definition is correct TRUE Statement is correct FALSE Regulated by the Federal Reserve (Fed) TRUE Statement is correct FALSE They are business to make a profit TRUE Statement is correct TRUE Definition is correct FALSE Excess reserves are Total reserves minus Required reserves TRUE Definition is correct TRUE Definition is correct TRUE Definition is correct
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