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CLEP Macroeconomics: Money And Banking

Subjects : clep, economics
Instructions:
  • Answer 42 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. The amount received by a lender and paid by a borrower expressed as a percentage of the amount of a loan






2. Who determines quantity of money supplied?






3. Lender of last resort - supervisor of member banks - provider of check-clearing services - and controller of money supply






4. Changing the money supply to assist the economy to achieve a full employment - noninflationary level of output






5. (1) medium of exchange; (2) store of value; (3) unit of account






6. Equilibrium force in quantity of money demanded and quantity of money supplied






7. Currency + demand deposits






8. The purchase or sale of government securities






9. Decrease interest rates to increase the money supply






10. Households using money to pay bills - purchase materials - etc.






11. Increase interest rates to decrease the money supply






12. M2 + deposits held by other financial institutions (trust companies - credit unions)






13. The money that a bank has in reserve which exceeds the reserve requirement






14. Quantity of money demanded and interest rate are ________ related






15. The multiple by which the banking system can expand the money supply for each dollar of excess reserves






16. How banks create money






17. Four categories of money






18. The amount that a bank must keep in its reserve in order to meet cash demands






19. Occurs when the Fed switches the deposits between its own accounts and the accounts of the commercial banks






20. When the Fed purchases securities it ________ the banks' reserves






21. Shows how interest rates affect investment expenditure - and ultimately real GDP - prices and unemployment






22. Each group is less liquid than the one before






23. If the Federal reserve lowers the reserve requirement - the interest rate will ________






24. Informal discussions that occur between the commercial banks and the Fed about monetary and other policies






25. The rate at which the Fed will loan money to commercial banks






26. What determines how much cash people will want to hold?






27. M1 + personal savings deposits + non-personal notice deposits (from chartered banks)






28. Shift of money demanded curve






29. Stems from the fact that money is a store of value and people hold their financial assets in many forms






30. The rate the Federal Reserve charges banks to borrow money






31. Open market operations effect the money supply and _______ _____






32. Entity responsible for managing the money supply in accordance with the needs of the economy






33. Decreases money supply






34. M2+ + non-personal term deposits + foreign currency deposits






35. Expansionary monetary policy is used during a period of _________






36. The Federal Reserve policies that are aimed at changing the size of the money supply and interest rates to affect the national economy






37. Movement along money demand curve






38. T/F. The transactions demand for money is dependent on the interest rate.






39. The ratio of a bank's cash assets to its deposit liabilities






40. 1/reserve requirement






41. Increases money supply






42. Contractionary monetary policy is used during a period of _________







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Can you answer 50 questions in 15 minutes?


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