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Homework answers / question archive / University of Maryland, University College - ECON 201 HW 4 1)With respect to measureing the money supply, which of the following terms describes a checking account? 2
University of Maryland, University College - ECON 201
HW 4
1)With respect to measureing the money supply, which of the following terms describes a checking account?
2. If the central bank increases the amount of reserves banks are required to hold to
20%, then
3. The people in an economy have $10 million in money. There is only one bank that all the people deposit their money in and it holds 5% of the deposits as reserves. What is the money multiplier in this economy?
4. Why do banks use t-accounts?
5. In modern economies, credit cards are a _________________ because of their wide acceptance as a method of payment for both goods and services.
6. _________________________ are a form of deposits held in banks that are available by making a cash withdrawal or writing a check.
7. Banks typically come under financial stress because of:
8. the deposits of many investors are pooled together and invested in a safe way like short-term
government bonds
9. In an economy with ___________money loses some buying power each year, but it remains money.
10. The process of banks making loans in financial capital markets is intimately tied to the:
11. Which of the following is a valid criticism of the use of money as a store of value in modern economies?
12. In macroeconomics, a _______________ describes the common way in which market values are measured in an economy.
13. With a __________you can store a certain value of
money on the card and then use the card to make purchases.
14. This___________________a bank’s liabilities can be
withdrawn in the short term while its assets are repaid in the long term—can cause severe problems for a bank.
15.________iterally trading one good or service for another—is highly inefficient for trying to coordinate the trades in a
modern advanced economy.
16. The term ___________________ describes the proportion of deposits that the bank must hold in the form of reserves that are not loaned out or invested in bonds.
17. In uncertain economic times, ____________________ serves as a way of preserving economic value that can be spent or consumed in the future.
18. _______________ serves society in three functions: medium of exchange, unit of account, and store of value.
19. If mollusk shells were accepted as a method of payment in modern-day markets, what economic role would they play in the financial system?
20. The money multiplier is equal to the _______________ in the economy divided by the original _________________.
21. Which of the following would function as a store of value, and also provide a medium of exchange, and unit of account?
22. The market in which loans are bought and sold
23. Stealth bank has deposits of $700 million. It holds reserves of $20 million and has purchased government bonds worth $350 million. The bank's loans, if sold at current market value, would be worth $600 million. What does Stealth bank's net worth equal?
