You are watching: A depository institution takes deposits from ______ and earns most of its income by _______.
Choose the correct statement.A.A credit card is money because it permits you to take a loan at the prompt you buy something.B.Deposits are money, checks are not money, and credit cards are not money.This is the correct answer.C.A inspect is money because while it is in circulation the quantity of money rises by the amount of the examine.D.Currency is money and credit cards are money bereason they are suggests of payment, however deposits are not money
a bank"s financial institution and also a public authority that regulates a nation"s depository institutions and also conducts monetary policy; Federal Reserve System
Choose the statement that is incorrect.A. Upper A advantage of a money market shared fund is that shareholders can compose checks on their accounts with no limitations.This is the correct answer.B. Upper A bank"s reserves are notes and coins in the bank"s vault or in a deposit account at the Federal Reserve.C. Liquid assets are overnight loans to various other financial institutions comma U.S. federal government Treasury bills comma and also commercial bills.D. Liquid assets deserve to be sold and also instantly converted right into reserves through practically no threat of loss.
Upper A benefit of a money sector mutual fund is that shareholders have the right to write checks on their accounts through no restrictions.
The proportion of reserves to deposits that a financial institution plans to organize is its ______.If a financial institution has $10 million in actual reserves and $8 million in desired reserves, then it has ______.
On average in the United States, the inflation rate and also the money development rate minus the actual GDP expansion rate ______.
When the Fed buys securities from a bank, a sequence of occasions begins. The occasions are listed below.Number each event in the order in which it occurs.
3) The quantity of money rises.2) Banks lfinish excess reserves.7) Desired reserves boost because deposits have actually enhanced.8) Excess reserves decrease.5) Some of the new money continues to be on deposit.6) Some of the new money is a money drainpipe .1) Banks have excess reserves.4) New money is offered to make payments.
The demand also for money is the connection between the quantity of real money demanded and the nominal interest rate once all other impacts on the amount of money that world wish to host reprimary the same
When the nominal interest rate rises, the possibility price of holding money ______ and the amount of real money demanded ______.
creating liquidity, lowering the price of borrowing, lowering the price of monitoring borrowers, and pooling risk
The liabilities of the Fed are ______, and also these liabilities along with ______ consist of the monetary base.
Federal Reserve notes organized by family members and businesses and reserves of depository institutions; coins issued by the Treasury
Suppose that potential GDP and also the velocity of circulation are constant. What is the change in the price level in the long run if the quantity of money rises by 2 percent a year?
If the amount of money increases by 2 percent a year, in the lengthy run the adjust in the price level is 2 percent a year.
Suppose the Fed rises the quantity of money.In the long run, supply and demand in the ______ industry determines the actual interemainder rate.The ______ adjusts to make the amount of actual money supplied equal to the amount demanded.
The money multiplier is the proportion of the adjust in the quantity of ______ to the adjust in the quantity of ______.
households and firms; making loans and also buying securities that earn a higher interest price than that paid to depositors
The deposits of the following 3 types of depository institutions make up the nation"s money: ______.
Choose the statement that is incorrect.A.When the Fed changes the monetary base, the amount of money and interemainder price adjust.B.The Fed"s liabilities plus coins issued by the Treasury comprise the financial base.C.Coins, which are issued by the Treasury are an ascollection of the Fed and also a component of the monetary base.This is the correct answer.D.The monetary base is the amount of Federal Reserve notes, coins, and depository institution deposits at the Fed.
Coins, which are issued by the Treasury are an asset of the Fed and also a component of the monetary base.
When the interest rate rises, other points remaining the same, the possibility cost of holding money ______ and ______.
there is a basic tendency for money expansion and inflation to be correlated yet the amount concept does not predict inflation precisely
The policy decisions of the Federal Open Market Committee are enforced each month by a various Federal Reserve Bank.
Suppose the Fed sells $50 million of federal government securities to the Bank of America.The Fed"s total assets ______ and its total liabilities ______. The Bank of America"s total assets ______ and also its total liabilities ______.
Choose the statement that is incorrect.A examine is an instruction to transfer money, however it is not money.While a check is in circulation, the quantity of money does not boost by the amount of the inspect.A crmodify card is an ID card that lets you take out a loan at the immediate you buy somepoint, yet it is not money. Deposits are not money because you cannot settle a debt with a deposit.
In the short run, the quantity of actual money and also actual GDP are offered and also the ______ adjusts to attain equilibrium.In the long run, supply and demand also in the loanable funds industry determines the ______.
In the long run, the price level adjusts to make the quantity of actual money supplied equal the quantity demanded.
A ______ is a depository school that accepts savings deposits and also makes mostly home-purchase loans.A ______ is a depository college owned by a social or economic group such as a firm"s employees that accepts savings deposits and renders greatly personal loans.
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Choose the statement that is incorrect.Liquid assets have a higher interest rate than securities. Liquid assets are the banks" initially line of defense if they need reserves.Liquid assets include overnight loans made by one financial institution to other banks, U.S. government Treasury bills, and also commercial bills.Liquid assets can be offered and instantly converted right into cash through practically no threat of loss.