ECO 203 Week 4 Quiz | Assignment Help | Ashford University
- ashford university / ECO 203
- 04 Mar 2020
- Price: $5
- Other / Other
ECO 203 Week 4 Quiz | Assignment Help | Ashford University
Question 1
Individuals accept dollars because __________.
o
Dollars are backed by gold
o
They know someone else will accept the
dollars
o
The government says they must
o
The Federal Reserve says they must
Question 2
Among the following, which are interest-earning
assets of a bank?
o
Excess reserves
o
Loans to the public
o
Demand deposits
o
Federal funds
Question 3
Money demand is __________
o
Negatively related to real income
o
Positively related to the interest rate
o
Negatively related to velocity
o
Positively related to real income
Question 4
The transactions demand for money reflects money’s
function as the __________.
o
Standard of value
o
Store of value
o
Unit of account
o
Medium of exchange
Question 5
Currently, which of the following is the Fed’s MOST
important function?
o
To be a lender of last resort
o
To manage the size of the money supply
to promote growth and employment
o
To regulate banks to keep them from
jeopardizing the safety of deposits
o
To propose the federal budget
Question 6
What occurred in October 1979 that was later labeled
the “Saturday night special”?
o
The Fed shifted from interest rate
targets to money supply targets.
o
The Fed shifted from money supply
targets to interest rate targets.
o
The Fed began to target the money
multiplier.
o
The Fed began to target loanable funds’
interest rates.
Question 7
The M1 money supply includes all but which of the
following?
o
Traveler’s checks
o
Circulating currency
o
Certificates of deposit
o
Checkable deposits
Question 8
During the Great Recession, which of the following
unconventional methods was NOT used by the Fed used to stabilize the economy?
o
Expanding the credit market to include
direct lending to nonbank financial firms
o
Lowering the federal funds rate to nearly
zero
o
Increasing the gold and silver reserves
of all member banks and financial firms
o
Guaranteeing the assets of firms deemed
“too big to fail”
Question 9
Which of the following is included in M2 but is NOT
in M1?
o
Currency
o
Savings deposits
o
Traveler’s checks
o
Checkable deposits
Question 10
The money supply fell during the Great Depression
because __________
o
The monetary base also fell
o
The public held less currency, and the
banks held less excess reserves
o
The public held more currency, and the
banks held more excess reserves
o
The Fed did not yet exist
USA 
India