13. A bank temporarily short of required reserves may be able to remedy this sit
ID: 1163724 • Letter: 1
Question
13. A bank temporarily short of required reserves may be able to remedy this situation by: A. borrowing funds in the Federal funds market. B. granting new loans. C. shifting some of its vault cash to its reserve account at the Federal Reserve. D. buying bonds from the public. 14. The asset demand for money is most closely related to money functioning as a: A. unit of account. B. medium of exchange. C store of value. D. measure of value 15. The four main tools of monetary policy are: A. tax rate changes, the discount rate, open-market operations, and the Federal funds rate. B. tax rate changes, changes in government expenditures, open-market operations, and the term auction facility. C the discount rate, the reserve ratio, the term auction facility, and open-market operations. D. changes in government expenditures, the reserve ratio, the Federal funds rate, and the discount rate 16. The purchase of government securities from the public by the Fed will cause: A. commercial bank reserves to decrease. B. the money supply to increase. C. demand deposits to decrease. D. the interest rate to increase. 17. Open-market operations change: A. the size of the monetary multiplier, but not commercial bank reserves. B. commercial bank reserves, but not the size of the monetary multiplier C. neither commercial bank reserves nor the size of the monetary multiplier. D. both commercial bank reserves and the size of the monetary multiplier.Explanation / Answer
13. A bank temporarily short of required reserves may be able to remedy this situation by borrowing funds in the federal funds market while suspending new loans and building up it's reserves as borrowers repay loans made by this bank earlier.
Answer-option A
14. The asset demand for money is most closely related to the money functioning as store of value, as it can be saved, exchanged at a later time and the value is maintained without any depreciation.
Answer- option C
15. The four main tools of monetary policy are - the discount rate, the reserve ratio, the term auction facility, and open market operations.
Answer- option C
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