Should the Federal Reserve System control the nation's money supply? How the Fed has responded to the COVID-19 Pandemic. Defend your position using economic principles

Initially, the banking system has a required reserve ratio of 20.0 percent, $450,000 in total deposits, and no excess reserves. If the Fed reduces the required reserve ratio to 15.0, how much unused lending capacity does the banking system now have?   Multiple Choice $750,000 $3,000,000 $337,500 $150,000

The term “moral hazard” describes increases in risky behavior resulting from efforts to make that behavior safer. How does the concept of moral hazard apply to deposit insurance and other bank regulations? Can you think of any arguments in favor of getting rid of the FDIC? How might doing so improve the safety of banks?

Suppose the balance sheet of Bigfoot Bank of America is shown below: Assets Liabilities Reserves $100 Deposits $5000 Loans $4900 a) The Reserve Requirement Ratio (RRR) is 0.04 or 4%. What is the Money Multiplier? b) Suppose that Skitch brings in a deposit of $300. What will be the new Deposits, Reserves and Loans amounts immediately after this deposit? Does the bank have any Excess Reserves at this point? How much? Show your work. Deposits = Reserves Loans Excess Reserves = c) What will be the Deposits, Reserves and Loans amounts after the entire money creation process has been completed. Show your work. Deposits = Reserves = Loans =

If the Fed wants to increase the money supply, it can decrease the federal funds rate. decrease the tax rate. sell bonds in the open market. increase the reserve requirement.

Is the Federal Reserve Bank important to our economy? Choose a side and support your argument with 2 reasons. Be thorough. 1 paragraph.

Which of the following is not included in either M1 or M2?   Question 28 options:   a)  U.S. Treasury bills   b)  small time deposits   c)  demand deposits   d)  money market mutual funds

The Federal Reserve conducts a $30 million open-market purchase of government bonds. If the required reserve ratio is 15 percent, the largest possible increase in the money supply that could result is   million, and the smallest possible increase is   million.

Compare the use of open market operations, discounting, and changes in reserve requirements to control the money supply

Why and when was the Federal Reserve created? 1) The Fed was created by the New Deal in 1934 to supervise national investment in publIc works 2) The Fed was created in 1913 in order to supervise banks and to control the money supply. 3) The Fed was created by John Quincy Adams in 1829, abolished by Andrew Jackson in 1831, and reconstituted by Theodore Roosevelt in 1909 as the official national bank tt the guarantor and the obligor for all commercial (not investment) banks 4) None of the above