During the Great Depression, the money supply fell 28%. During that same time, the monetary base ____ and the currency-to-deposit ratio and reserve-to-deposit ratios both _____. a. rose; fell b. rose; rose c. fell; rose d. fell; fell ANSWER B
Most canals were economic failures. Indicate whether the statement is true or false ANSWER TRUE
As entrepreneurs find new market niches and help specific industries grow, other industries will (a) grow proportionately. (b) grow disproportionately. (c) fail. (d) grow disproportionately and fail. ANSWER (d)
The money multiplier is the ratio of a. bank reserves to bank deposits. b. the change in the money supply to the change in the monetary base. c. the money supply to the monetary base. d. bank deposits to bank reserves. e. both b and c. ANSWER E
An open market purchase immediately impacts the banking system balance sheet by a. increasing required reserves. b. increasing deposits. c. increasing the money multiplier. d. increasing excess reserves. e. none of the above. ANSWER D
Throughout U.S. history labor and physical capital have been (a) input substitutes and complements. (b) output substitutes and complements. (c) product displacements. (d) mixed outputs. ANSWER (a)
Which of the following would be an asset on a consolidated balance sheet for a commercial bank? a. Checkable deposits b. Time and savings deposits c. Reserves held on deposit at the Federal Reserve d. Borrowing from the Federal Reserve ANSWER C
To secure a charter, the deciding bodies required which of the following from the business enterprises? (a) A statement of business purpose and location (b) A business plan (c) A description of capital and labor requirements and expectations (d) All of the above ANSWER (d)
The portion of the money supply controlled by a central bank is a. currency. b. deposits. c. reserves. d. the monetary base. e. the money multiplier. ANSWER D
Mass production during U.S. industrialization involved using which of the following? (a) Interchangeable parts (b) Division of labor and specialization (c) The assembly line (d) All of the above ANSWER (d)