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Money and Banking
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Money and Banking
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25 Questions

1. In the simple deposit expansion model, if the Fed extends a $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase by

2. Patrick places his pocket change into his savings bank on his desk each evening. By his actions, Patrick indicates that he believes that money is a:

3. Pure expectations theory

4. Open market purchases ____ reserves and the monetary base thereby _____ the money supply.

5. Total value of assets

6. Cost push

7. Central bank buys bonds

8. The Federal Reserve was created to:

9. A short-term debt instrument issued by well-known corporations is called:

10. A plot of the interest rates on default-free government bonds with different terms to maturity is called

11. Aggregate demand goes up

12. Implementation lag:

13. Federal funds are

14. The public's fear of centralized power and distrust of moneyed interests led to the demise of the first two experiments in central banking, otherwise known as:

15. The time and money spend in carrying out financial transactions are called:

16. Random citizen buys bonds

17. ____ is the relative ease and speed with which as asset can be converted into a medium of exchange.

18. According to the expectations theory of the term structure:

19. Open market sales _____ reserves and the monetary base thereby ____ the money supply.

20. Storing money

21. ______ is a flow of earnings per unit of time.

22. According to the segment market theory of the term structure:

23. A credit market instrument that required the borrower to make the same payment every period until the maturity date is known as a:

24. Saving money

25. The total quantity demanded of an economy's output is the sum of 4 types of spending: