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






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






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






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






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






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






7. Decrease interest rates to increase the money supply






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






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






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






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






12. Shift of money demanded curve






13. Four categories of money






14. Decreases money supply






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






16. The amount received by a lender and paid by a borrower expressed as a percentage of the amount of a loan






17. How banks create money






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






19. Increases money supply






20. Movement along money demand curve






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






22. Currency + demand deposits






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






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






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






26. The purchase or sale of government securities






27. Each group is less liquid than the one before






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






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






30. Increase interest rates to decrease the money supply






31. Who determines quantity of money supplied?






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






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






34. 1/reserve requirement






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






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






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






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






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






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






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






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







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