1. When the banking industry in aggregate has a higher reserve ratio than the required reserve ratio, the:A. greater the money multiplier.B. more money will be created.C. smaller the money multiplier.D. greater the level of required reserves.2. If I took cash from my mattress/sock drawer/or some other place and deposit $100 in my local bank, this canlead to a maximum expansion in bank deposits of $500. Using the simple money multiplier formula, therequired reserve ratio must be:A. 20 percent.B. 25 percent.C. 40 percent.D. 50 percent.3. If you personally knew in 2020 that interest rates would jump from 2% to nearly 7% in 2022, you wouldwant to be holding:A. more money because bond pries will likely fall.B. less money because bond pries will likely rise.C. more money because bond pries will likely rise.D. more money because bond pries will stay the same due to fed policy.4.In 2008 the Federal Reserve decreases the reserve requirement as part of the stimulus, it:A. decreases the amount of excess reserves and this eventually increases the money supply.B. decreases the amount of excess reserves and this eventually decreases the money supply.C. decreases the amount of excess reserves and impacts the money supply slightly due to AS/AD model.D. increases the amount of excess reserves and this eventually decreases the money supply.5. From one day to the next, an increase in the nightly Federal funds rate could be caused by:A. an open market purchase of government securities.B. an increase in the reserve requirement.C. an open market purchase of government securities by Goldman SachsD. an increase in the excess reserves of the banking system.6. Monetary policy that seeks to minimize the business cycle in the AS/AD model involves:A. contractionary monetary policy throughout the business cycle.B. expansionary monetary policy throughout the business cycle.C. contractionary monetary policy during boom periods and expansionary monetary policy during recession.D. contractionary monetary policy during recession and expansionary monetary policy during boom periods.7. Inflation in 2024 is expected to be 4%. If in fact it comes in at 2%, this would:A. help banks and borrowers.B. help banks but hurts borrowers.C. help borrowers but hurts banksD. hurt banks and borrowers.8. If in 2023 the growth rate of real GDP is 2 percent and the growth rate of the money supply is 5 percent, anadvocate of the quantity theory of money would predict a:A. 2 percent inflation.B. 3 percent deflation.C. 7 percent inflation.D. 3 percent inflation. 23. The likely effect of a contractionary monetary policy in Japan would be to:A. decrease the value of the dollar and the U.S. trade deficit.B. increase the value of the dollar and the U.S. trade deficit.C. decrease the value of the dollar and increase the U.S. trade deficit.D. increase the value of the dollar and decrease the U.S. trade deficit.24. In April 2022 the Federal Reserve boosted its target for the Federal funds rate for the first time in 14 years,increasing it from a 10-year low of .25% to 4.25%. What role did the Biden Administration have in thisdecision?A. None; the Fed is not accountable to the executive branch of government.B. Some; most but not all of the people who voted for this change are appointees of the Bush Administration.C. Considerable; if the Bush Administration were unhappy with the decision, it could force the resignation ofthose who voted in ways it did not like.D. Total; policy makers at the Fed serve at the pleasure of the President.25. When the Fed reduces the discount rate, this sends a signal to banks that the Fed wants:A. the money supply to expand.B. the money supply to contract.C. the Federal funds rate to increase.D. to reduce the reserve requirement.

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Banking refers to the system of financial institutions and practices that facilitate various…

1. When the banking industry in aggregate has a higher reserve ratio than the required reserve ratio, the: A. greater the money multiplier. B. more money will be created. C. smaller the money multiplier. D. greater the level of required reserves.