The three most volatile and unpredictable sources of the monetary base are: Trea

Question

The three most volatile and unpredictable sources of the monetary base are: Treasury deposits, Discount Loans, and Float Gold, Other Assets, and Float Gold, Foreign deposits, and Discount Loans Treasury currency holdings, Gold, Foreign deposits Suppose the Fed suddenly and unexpectedly increases the discount rate by one full percentage point, and banks decrease borrowing from the Fed. Which of the following is most likely to occur? B increase and money supply increases. rr increase and money supply decreases monetary base decreases and money supply decreases none of the above will likely occur Given the size of the variables underlying the money supply multiplier, which variable currently is likely to introduce the least variability in the size of the multiplier? B K rr er Which of the following is an important determinant of the currency ratio, K? development of substitutes for demand and other checkable deposits the size of the U.S. underground economy the level of income and wealth all of the above The long-term movements in the money supply multiplier are dominated by movements in: the currency to deposit ratio the excess reserve ratio the required reserve ratio the time deposit ratio A sharp increase in Treasury bill yields should cause: a decrease in the desired excess reserve ratio (er) a decrease in the money supply multiplier a decrease in the monetary base none of the above Which of the following tends to increase a bank's desired excess reserve ratio? higher interest rates increased uncertainly about future economic conditions expectations of easier Federal Reserve policies all of the above

Explanation / Answer

84. A

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