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Money, Banking, and Monetary Policy: Test
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Money, Banking, and Monetary Policy: Test
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5 Questions

1. Which of the following is a way that the Fed can increase the money supply?
2. If the money supply increases, what happens in the money market (assuming money demand is downward sloping)?
3. If a bank has $500 in checking deposits and the bank is required to reserve $50, what is the reserve ratio? How much does the bank have in excess reserves?
4. Which of the following is a likely result of expansionary monetary policy in a recession?
5. "Which function of money best defines $1.25 as the price of a 20-ounce bottle of pop?"

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