Any transaction that involves exchanging one good for another without using money is considered a Group of answer choices barter transaction. deferred payment. token exchange. liquidity transaction.

The velocity of money  A) is calculated as P/M.  B) indicates the number of times per year a currency unit is used as a medium of exchange.  C)indicates the speed with which the Canadian Treasury can mint new currency.  D) is equal to 2k in the Cambridge equation.

The banking industry A) should have an efficiency advantage in gathering information that would eliminate the need for the money markets. B) exists primarily to mediate the asymmetric information problem between saver-lenders and borrower-spenders. C) is subject to more regulations and governmental costs than the money markets. D) all of the above are true. E) only A and B of the above are true.

What is a barter system?  List major difficulties of the barter system.

An open-market purchase of government securities by the Fed will: Multiple Choice   increase bank reserves, and the money supply will increase.   decrease bank reserves, and the money supply will increase.   increase bank reserves, and the money supply will decrease.   decrease bank reserves, and the money supply will decrease.

The central bank buys $10,000 worth of bonds in the open market from Elaine, who deposits the proceeds in her checking account at MSM Bank. The required reserve ratio is 5%. (a) What is the amount by which MSM Bank’s liabilities have changed? Explain. (b) Calculate the change in required reserves for MSM Bank. Show your work. (c) What is the dollar value of the maximum amount of new loans MSM Bank can initially make as a result of Elaine’s deposit? Explain. (d) Based on the central bank’s open-market purchase of bonds, calculate the maximum amount by which the money supply can change throughout the banking system. Show your work. (e) How will the change in the money supply in part (d) affect aggregate demand and the price level in the short run? Explain.

All of the following items, except one, are part of the equation of exchange. Which is the exception? Multiple Choice a)Real output. b) The interest rate. c)The money supply. d)The velocity of money. e)The price level.

Bank deposits (D) 350  Currency-to-deposits ratio (c) 0.20  Required reserve ratio (rr) 0.15  Suppose there is a sudden rise in the currency-to-deposits ratio, from the original level of 0.2 to a new level of 0.4. If everything else remains unchanged, find the level of monetary base needed to keep money supply fixed at the level you solved for in part c. ( money supply = 420)