The price for a ticket to rhe Super Bowl is $500." This statement best illustrates _____
Money used as a unit of account.
If you use money as a store of value, you would be putting money into a _____
Savings account.
What are NOT part of M1?
Savings deposits.
If more money is demanded than is supplied, then _____
Interest rates will increase.
In the money market graph there is an ________ between the ________ and the _______
Inverse relationship, nominal interest rate, and the quantity of money demanded.
________means that banks are required to keep part of their demand _______
Fractional reserve banking, deposits as reserves.
Banks may not be able to create the maximum amount of money from a new deposit as a result of individuals _______
Holding a larger portion of their assets as cash.
When an economy is at full employment, an expansionary monetary policy will lead to _____ interest rates and _____ investment
Lower, more.
If the Federal Reserve Raises the discount rate, interest rates will ____ increase and real GDP will ____
Increase, decrease.
To eliminate an inflationary gap, the Federal Reserve might ______
Sell bonds on the open market.
The Federal Reserve can _____ the money supply by ______ on the open market
Increase, buying bonds.
If the Federal Reserve conducts an open market purchase of bonds, we can expect that there will be a movement to the ______
Left of the short run Phillips curve.
When consumers hold money rather than bonds because they expect the interest rate to ____ in the future, they are ______
Increase, holding money for speculation.
If on receiving a checking deposit of $500 a banks excess reserves _____ the require Reserve must be ____
Increased by $400, 20%.
Assume the required Reserve ration is .2. If a bank initially has no Excess Reserves and $100,000 cash is deposited in the bank, the max amount by which the bank may _____
Increase its loans is $80,000.
Certificates of deposits issued to acdc's customers, vault cash and money that acdc has deposited with the Federal Reserve are _____ for the acdc bank.
Are all assets.
If the required reserves is 10% and that bank receives a new demand deposit of $300, ________ by $300 and ______ by $30.
Liabilities will increase, required reserves will increase.
The federal Reserve can change the US money supply by ______
Changing the Discount Rate.
Open market operations refers to the ______ of gold in the New York stock market.
Buying and selling.
An open market purchase of bonds by the fed will most likely change the __1_____, __2_____, and the __3_____.
Money supply, interest rate, unemployment rate. 1:MS increase 2:IR decrease 3:UNR decrease.
The federal funds rate is the _____ that banks charge one another for _____
Interest rate, short term loans.
If the fed institutes a policy to reduce inflation, ______ are most likely to ______
Interest rates, increase.
If the supply for loanable rates ______, real interest rates will ______and investment will ______
Increase: decreases, increases
When government spending cause an increase in real interest rates, gross private domestic investment will experience ______
Increase, crowding out.
Suppose businesses are fearful that there will be a recession on the near future. The impact of this belief will see a _____ for loanable funds with a ______ on the interest rate
Decrease, decrease.
Assume that a perfectly competitive financial market for loanable funds is in equilibrium. Which of the following is most likely to occur to the quantity demanded and the quantity supplied of loanable funds if the go puts a cap (ceiling) on the interest r
Quantity demanded will increase while quantity supplied will decrease.