Which of the following statements is (are) correct? The Federal Reserve a. can, over the long run, roughly control the money supply by changing the monetary base to offset any undesirable changes in the money stock as a result of changes in currency holdings or excess reserve holdings. b. controls the money supply better in […]
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
Creative destruction includes all of the following except (a) The rise of the automobile industry at the expense of the carriage industry (b) The rise of the computer industry at the expense of the typewriter industry (c) The destruction of all capital during economic busts (d) There is no except; all of the above are […]
Legal reserve requirements specify that banks must hold a certain percentage of their deposit liabilities a. in currency only. b. as deposits at regional Federal Reserve Banks only. c. either in currency or as deposits at regional Federal Reserve Banks. d. None of the above ANSWER C
Special interest groups (such as doctors, teachers, lawyers, health insurance companies, the automobile industry and others) can best be characterized by which of the following statements? (a) They are constantly working the government to seek rents from policy decisions. (b) They are resistant to change in governmental policies that benefit them at the expense of […]
If the Fed follows a policy of fixed exchange rates, an undervalued dollar will force the Fed to a. conduct open market purchases. b. raise the discount rate. c. raise the required reserve ratio. d. cut taxes or raise government spending. ANSWER A
Chief Justice John Marshall had a strong conviction that (a) slavery would only work in the South. (b) a country needs a central government with enough power to place in check state and local interests when the development and growth of the country is concerned. (c) strong state banking systems would help the nation’s commerce. […]
