宏观经济学：理论与政策（第九版）题库 9-CH16-TB

PARTV:ECONOMICPOLICY

CHAPTER16:MONEY,THEBANKINGSYSTEM,AND

INTERESTRATES

ADDITIONALQUESTIONS

EssayQuestionsand/orProblems:

1.Forthesequestions,supposethatthereserverequirementforcheckingdepositsis25%,thatbanksdo

notholdanyexcessreserves,andthatthepublicdoesnotchangetheirholdingsofcurrency.Total

reservesalreadyexistinginthebankingsystemare$300million.

(a).Whatisthemoneysupplyinthiseconomy?

Themoneysupplyis$1.2billion,or$1,200million.

(b).IftheFedsells$4millionofT-Bonds,whatisthechangeintheeconomy'smoneysupply?

Themoneysupplyfallsby$16million.

(c).IftheFedwouldreducethereserverequirementto20%,whatwouldbethechangeinthemoney

supply?

Themoneysupplywouldincreaseto$1.5billion.

(d).IftheFedreducedthereserverequirementratioto20%butbankspreferredtoholdtheextra5%

asexcessreserves,whatwouldbethechangeinthemoneysupply?

Therewouldbenochangeinthemoneysupply.

2.Assumethatbanksholdnoexcessreservesandthepublicdoesnotchangetheircurrencyholdings.If

currencyis$800,totalbankreservesare$2,000,andcheckabledepositsare$20,000,then

(a),whatisthemonetarybase?

Themonetarybasetotals$2,800.

(b).whatisthemoneysupply?

Themoneysupplyamountsto$20,800.

(c).iftherequiredreserveratiois10%andbanksholdnomoreexcessreserves,thenwhatwillthe

moneysupplybeiftheFedincreasestotalbankreservesby$100?

Themoneysupplywillbe$21,800.

3.WhattoolscantheFederalReserveusetocontrolthemonetarybase?Explainthewayinwhich

changesineachtoolaffectthelevelofbankreserves.Whichtooldotheychoosetouseonaday-to-

daybasis,andwhy?

Itcancontrolthereservepositionofbanksbymeansofopen-marketoperations,thediscountrate,

andthereserverequirementratio.Open-marketsales,reductionsinthediscountrate,andreductions

inthereserverequirementratioallincreasethelevelofbankreservesinthesystem.TheFeduses

openmarketoperationsbecauseitiseasytodo,quicktoimplement,andallowsforsmallchangesin

themonetarybase.

4.WhatistheeffectofaFederalReserveopenmarketsale?Whathappenstointerestratesinthe

moneymarketandfederalfundsmarketasaresult?Provideagraphofthemoneymarketandfederal

fundsmarkettoillustrate.

Anopenmarketsalereducesbankreserves,shiftsthemoneysupplycurvetotheleftandincreases

interestrates.Italsoreducesthesupplyofreservesinthefederalfundsmarket,reducingthefederal

fundsrate.

5.Ifyouwriteacheckfor$100toyourroommatewhoimmediatelydepositsit,whatisthemaximum

amountofchangeinthemoneysupply?

Thereisnochangeinthemoneysupplybecausetherehasbeennochangeintotalbankreserves.

6.“Intherealworld,ifthereserverequirementsoncheckabledepositsweresetatzero,theamountof

multipledepositexpansionwouldgoonindefinitely.99Isthistrueorfalse?Explain.

False.Bankswouldstillchoosetoholdsomeexcessreservesandthepublicwouldstillchooseto

holdsomecurrency.Bothofthesewouldlimitthesizeofthemoneymultiplier.

7.Whatarethethreefunctionsofmoney?Whichofthesefunctionsareemphasizedintheclassicaland

Keynesianmodels?Also,discusshowinflationreducestheefficiencybywhichmoneyserveseach

ofthesefunctions.

Moneyisamediumofexchange(emphasizedbytheclassicalmodel),astoreofvalue(emphasized

bytheKeynesianmodel),andaunitofaccount.Inflationmakesholdingmoneymorecostly,reducing

itsusefulnessasamediumofexchangeandastoreofvalue.Italsocreatesconfusion,whichreduces

itsuseasaunitofaccount.

8.WhoarethetwomonetarypolicymakinggroupslocatedinWashington?Whataretheirfunctions?

TheyaretheBoardofGovernorsoftheFederalReserveBankandtheFederalOpenMarket

Committee,alsoknownastheFOMC.TheBoardofGovernorssupervisesthediscountrateandthe

requiredreserveratio.TheOpenMarketCommitteeoverseesopen-marketoperations.

9.Explainthewayinwhichthevalueofthemoneymultiplierandthemoneysupplywouldbeaffected

byeachofthefollowing:

(a),ariseinthepublic'sdesiredratioofcurrencytocheckabledeposits.

Themoneymultiplierandthemoneysupplywillfall.

(b).afallinthebankingsystem*sdesiredexcessreservetocheckabledepositsratio.

Themoneymultiplierandthemoneysupplywillrise.

10.SupposethatthebalancesheetofLocalStateBankisasfollows:

ASSETSLIABILITIES

Reserves$15,000Checkabledeposits$20,000

Loans$4,000

Bonds$1,000

(a).Iftherequiredreserveratiois10%,whatisthemaximumamountofnewloansthatthisbank

cancreate?Explain.

Thisbankhastoholdrequiredreservesof$2,000,soithas$13,000inexcessreserves.

(b).Ifadepositorwithdraws$2,000,nowwhatisthemaximumamountofnewloansthatthisbank

cancreate?Explain.

Thisbankloses$2,000indepositsand$2,000inreserves.Itnowhastohold$1,800inrequired

reserves,soithas$11,200.

(c).SupposethattheFedsells$1,000ofT-bondstotheLocalStateBank.Showwhathappensto

LocalStateBank'sbalancesheet.Whathappenedtothemonetarybase?

Themonetarybasefallsby$1000.LocalStateBankseesitsholdingsofbondsriseby$1,000andits

reservesfallby$1,000.

AdditionalEssayQuestionsand/orProblems:

11.SupposethattheFederalReservesellsgovernmentsecuritiesintheopenmarket.Tracethelinkages

throughwhichthisactionwillaffectthemoneystock,levelofinterestrates,andlevelofeconomic

activity.

12.IsitpossiblefortheFederalReservetosetandachievetargetlevelsforboththemoneystockandthe

interestrate?Whyorwhynot?

13.Monetarists,includingMiltonFriedman,havearguedthatcentralbankshavebeenthecauseofall

recessionsandexpansions.Asevidenceofthis,theynotethatMlisstronglypositivelycorrelated

withoutput.Basedonyourknowledgeofthemoneycreationprocess,doyouthinkthattherecould

beanalternativeexplanationtothisargument?

14.Explainthedifferencebetweenthediscountrateandthefederalfundsrate.WhichdoestheFed

directlycontrol?Whichhasthemostimpactonthebankingsystem,andwhy?

15.Analyzethefollowingstatement:4CThemoneysupplyfellquitedramaticallyduringtheGreat

Depression.Thus,theFederalReservewasactivelyresponsibleforthefallinincomethatoccurred.^^

Multiple-ChoiceQuestions:

1.Themonetarybaseconsistsof

a.governmentsecuritiesheldbytheFederalReserve.

b.themoneysupply.

c.currencyandbankdepositsattheFederalReserve.

d.currencyandbankreservedepositsattheFederalReserve.*

e.currencyandbankdeposits.

2.Whichofthefollowingfunctionsexpressthemoneymultiplier(m)forthenarrowlydefinedmoney

stock(Ml)?

a.m=AMS/A(MB)=m(rrd)

S

b.m=AM/A(MB)=m(rrd,CU/D,ER/D)*

S

c.m=AM/A(MB)=m(rrd+CU/D)

d.m=AMS/A(MB)=m(rr/D,CU/D,RR/D)

3.IftheFederalReservesells$10millioningovernmentsecuritiesintheopenmarket,witha10

percentrequiredreserveratioondeposits,themaximumincreaseindepositswouldbe

a.-$50million.

b.-$100million.*

c.$10million.

d.$100million.

e.noneoftheabove

4.ThemostcommonlyusedtoolbytheFederalReservetocontrolthemonetarybaseis

a.changesinthediscountrate.

b.changesintaxratesoncommercialbanks.

c.changesinlegalrequiredreserveratios.

d.openmarketoperations.*

5.Ifcommercialbanksholdcheckabledepositsof$100,000,reservesof$30,000,andtherequired

reserveratiois20percent,whatisthemaximumadditionalamountbywhichthebankingsystemcan

expandthemoneysupply?

a.$20,000

b.$30,000

c.$50,000*

d.$60,000

e.-$50,000

6.IftheFederalReservepurchases$1millioningovernmentsecuritiesintheopenmarket,witha25

percentrequiredreserveratioondeposits,themaximumincreaseindepositswouldbe

a.$4million.*

b.$10million.

c.$25million.

d.-$4million.

e.noneoftheabove

7.Assumingeachpolicyisperformedwiththesamemagnitude,whichofthefollowingwouldbethe

mostrestrictivemonetarypolicyactiononthepartoftheFederalReserve?

a.Sellgovernmentsecurities,raisereserverequirements,andlowerthediscountrate

b.Buygovernmentsecurities,raisereserverequirements,andraisethediscountrate

c.Sellgovernmentsecurities,lowerreserverequirements,andraisethediscountrate

d.Sellgovernmentsecurities,raisereserverequirements,andraisethediscountrate*

8.TheFederalreservepreferstouseopenmarketoperationsbecause

a.itallowsforsmallchanges.

b.itseffectsarewellunderstood.

c.itiseasytoconduct.

d.bothaandb.

e.alloftheabove.*

9.Assumingtherequiredreserveratiois20percentandtotalreservesaresetat$20billion,thenthe

maximumamountofdepositswouldbe

a.$100billion.*

b.$40billion.

b.$4billion.

d.$60billion.

e.$120billion.

10.IftheFederalReserveweretosimultaneouslysellgovernmentbondsintheopenmarketand

decreasethediscountrate,the

a.moneysupplywillincrease.

b.moneysupplywilldecline.

c.moneystockwillstaythesame.

d.twotoolswillworkinoppositedirectionsandtheeffectonthemoneysupplyisuncertain.*

11.Ifyouwriteacheckonyourcheckingaccounttopayyourrentwhichyourlandlorddepositsina

bank,then

a.themonetarybaseandthemoneysupplywillfall.

b.themonetarybasefallsbutthemoneysupplyremainsunchanged.

c.thereisnochangeinthemonetarybaseorthemoneysupply.*

d.themonetarybaseandthemoneysupplywillrise.

12.Whichofthefollowingisthelargestassetonaconsolidatedbalancesheetforacommercialbank?

a.Checkabledeposits

b.governmentbonds

c.Cashassets,includingreserves

d.Loans*

e.BorrowingfromtheFederalReserve

13.IftheFederalReserveincreasesthelegalreserverequirementondeposits,

a.themoneystockwillriseandthemoneymultiplierwillfall.

b.themonetarybasewillriseandthemoneymultiplierwillfall.

c.boththemonetarybaseandthemoneystockwillfall.*

d.neitherthemonetarybasenorthemoneystockwillrise.

14.IftheFederalReserveraisesthediscountrate,themarketrateofinterest

a.willrisebutthemonetarybasewillbeunchanged.

b.willriseandthemonetarybasewillfall.*

c.andthemonetarybasewillbothrise.

d.willfallandthemonetarybasewillrise.

15.WhichofthefollowingisnotafunctionoftheFed?

a.controltherequiredreserveratio.

b.controltheamountofcommerciallendinginthebankingsystem.*

c.serveasalendertocommercialbanks.

d.conductpurchasesandsalesofgovernmentbonds.

e.regulatecommercialbanks.

16.Thefederalfundsmarketisthemarketfor

a.loansfromthefederalgovernment.

b.loansfromtheFederalReserve.

c.governmentborrowingandlending.

d.interbanklending.*

e.alloftheabove.

17.AmemberoftheBoardofGovernorsoftheFederalReserveisappointedby

a.Congressfor12years.

b.thePresident,withtheadviceandconsentoftheSenate,fora14-yearterm.*

c.thePresident,forlife.

d.membersoftheHouseofRepresentativesfora10-yearterm.

18.TheOpenMarketCommitteeiscomposedof

a.the7membersoftheBoardofGovernors.

b.the7membersoftheBoardofGovernorsandthepresidentoftheFederalReserveBankinNew

York.

c.12votingmembers,andofthese,5arepresidentsofregionalFederalReservebanksandtheother

7arethemembersoftheBoardofGovernors.*

d.thepresidentsofeachofthe12FederalReservebanks.

19.TheFederalOpenMarketCommitteeisresponsiblefordirecting

*a.issuinggovernmentsecurities.

b.settingmonetarypolicy.*

c.settingreserverequirements.

d.printingmoney.

e.Alloftheabove

20.IntheKeynesianmodel,aFederalReservesaleofgovernmentsecuritiesintheopenmarketwill

a.raisethelevelofincomeandlowertheinterestrate.

b.raisethelevelofincomeandraisetheinterestrate.

c.lowerthelevelofincomeandtheinterestrate.

d.lowerthelevelofincomeandraisetheinterestrate.*

21.Ifafearofincreasedbankruptciesoffirmscausesbankstoincreasetheirreservetodepositratio,

then

a.themoneysupplyandmoneymultiplierwillrise.

b.themonetarybaseandthemoneymultiplierwillfall.

c.therewillbenochangeinthemoneymultiplier,butthemoneysupplywillfall.

d.themoneymultiplierandthemoneysupplywillfall.*

22.Legalreserverequirementsspecifythatbanksmustholdacertainpercentageoftheirdeposit

liabilities

a.incurrencyonly.

b.asdepositsatregionalFederalReserveBanksonly.

c.eitherincurrencyorasdepositsatregionalFederalReserveBanks.*

d.Noneoftheabove

23.IftheFedfollowsapolicyoffixedexchangerates,anundervalueddollarwillforcetheFedto

a.conductopenmarketpurchases.*

b.raisethediscountrate.

c.raisetherequiredreserveratio.

d.cuttaxesorraisegovernmentspending.

24.Thefederalfundsinterestrate

a.canberaisedorloweredbytheFederalReservetoregulatethevolumeofloanstobanks.

b.isadministeredbytheOpenMarketCommittee.

c.increaseswhenthefedconductsopenmarketpurchases.

d.issetbyCongress.

e.noneoftheabove.*

25.Whichwouldbealiabilityonabalancesheetofacommercialbank?

a.Anoutstandingcommercialloan

b.AU.S.Treasurybond

c.Acertificateofdepositissuedbythebank*

d.Vaultcash

e.Noneoftheabove

26.Themoneysupplyisdetermined

a.onlybytheFed.

b.bytheFedandbanks.

c.bytheFed,banks,andthepublic.*

d.bycongress.

e.bythePresident.

27.Ifthemoneysupplyis$1billion,thereserverequirementis10%,andcurrencyholding$50million,

thenreservesare

a.$50million.*

b.$100million.

c.$20million.

d.$40million.

e.noneoftheabove

28.Whichofthefollowingstatementsis(are)correct?

a.Changesinreserverequirementsareoftenusedtoaffectbanks*reservepositions

b.Changesinreserverequirementsareseldomusedtoaffectbanks*reservepositions

c.Changesinthediscountratearerarelyusedtochangebanks5reservepositions

d.Increasesinreserverequirementscausebankstoholdlessnoninterestpayingreserves

e.Bothbandc*

29.Sincereserverequirementsontimeandsavingsdepositswerephasedoutintheearly1990s,

a.onlytheMlmoneymultiplierisaffectedbyincreasesintimeandsavingsdeposits.

b.onlytheM2moneymultiplierisaffectedbyincreasesintimeandsavingsdeposits.*

c.neithertheMlnortheM2moneymultipliersareaffectedbyincreasesintimeandsavings

deposits.

d.boththeMlandM2moneymultipliersareaffectedbyincreasesintimeandsavingsdeposits.

30.Assuminganincreaseinmoneydemand,theniftheFederalReserve

a.cankeeptheinterestrateunchangedassumingthatitchangesthemonetarybasebythe

appropriateamount.*

b.wouldhavetoaimbelowtheirpreviousmoneystocktarget.

c.wouldnothavetocuttaxestokeepoutputfromfalling.

d.Alloftheabove

e.Noneoftheabove

31.Whichofthefollowingstatementsis(are)correct?TheFederalReserve

a.can,overthelongrun,roughlycontrolthemoneysupplybychangingthemonetarybasetooffset

anyundesirablechangesinthemoneystockasaresultofchangesincurrencyholdingsorexcess

reserveholdings.

b.controlsthemoneysupplybetterinthelong-runbecauseofshort-rununcertaintyregardingthe

moneymultiplier.

c.isinabsolutecontrolofthemoneystockatalltimes.

d.Bothaandb*

32.Whichofthefollowingwouldbeanassetonaconsolidatedbalancesheetforacommercialbank?

a.Checkabledeposits

b.Timeandsavingsdeposits

c.ReservesheldondepositattheFederalReserve*

d.BorrowingfromtheFederalReserve

33.Theportionofthemoneysupplycontrolledbyacentralbankis

a.currency.

b.deposits.

c.reserves.

d.themonetarybase.*

e.themoneymultiplier.

34.Ifthemoneysupplyis$200million,thereserverequirementis20%,andcurrencyholding$10

million,thenreservesare

a.$10million.

b.$40million.

c.$30million.*

d.$40million.

e.noneoftheabove

35.Ifthereserverequirementdecreasesfrom20%to25%andthecurrencytodepositratioincreases

from10%to15%then

a.themoneymultiplierandthemoneysupplyrises.

b.themoneymultiplierandthemoneysupplystaysthesame.*

c.themoneymultiplierandthemoneysupplyfalls.

d.themoneymultiplierroseandthemoneysupplyfalls.

36.Themoneymultiplieristheratioof

a.bankreservestobankdeposits.

b.thechangeinthemoneysupplytothechangeinthemonetarybase.

c.themoneysupplytothemonetarybase.

d.bankdepositstobankreserves.

e.bothbandc.*

37.Anopenmarketpurchaseimmediatelyimpactsthebankingsystembalancesheetby

a.increasingrequiredreserves.

b.increasingdeposits.

c.increasingthemoneymultiplier.

d.increasingexcessreserves.*

e.noneoftheabove.

38.Whichofthefollowingvariablesthataffectthemoneystockareoutsidethedirectcontrolofthe

FederalReserve?

a.Currency/depositratio

b.Excessreserve/depositratio

c.Requiredreserve/depositratio

d.Thespeedofthemoneycreationprocess.

e.Bothaandb*

39.Whichofthefollowingwilllowerthemoneymultiplier?

a.Anincreaseinthecurrency/checkabledepositratio*

b.Adecreaseintheexcessreserve/checkabledepositratio

c.Adecreaseintherequiredreserve/checkabledepositratio

d.Eitheraorb

e.Alloftheabove

40.DuringtheGreatDepression,themoneysupplyfell28%.Duringthatsametime,themonetarybase

andthecurrency-to-depositratioandreserve-to-depositratiosboth.

a.rose;fell

b.rose;rose*

c.fell;rose

d.fell;fell

41.AssumetheFederalReserveincreasestherequiredreserveratiofrom10to20percentandreserves

are$80billion.Thenthechangeinthemoneysupplywillbe

a.$80billion.

b.$20billion.

c.$400billion.*

d.$800billion.

e.noneoftheabove

42.AssumethattheFederalReservehaspurchaseda$1,000securityfromanindividual,therequired

reserveratiois20percent,andthatindividualdepositstheproceedsinhisbank.Whatisthe

increaseinexcessreservesforthisbank?

a.$200

b.$1,000

c.$1,200

d.$800*

e.$2,000

43.IntheUnitedStatestherewerelegalreserverequirementsontimeandsavingsdepositsduringmost

ofthepost-WorldWarIIperiod.Therefore,themoneymultiplierfortheMldefinitionwas

a.smallerwhentimeandsavingdepositsincreased.*

b.smallerwhentimeandsavingdepositswereassumedtobefixed.

c.largerwhentimeandsavingdepositsincreased.

d.smallerwhentimeandsavingdepositsdecreased.

44.IftheFederalReservesimultaneouslysellsgovernmentbondsintheopenmarketandraisesreserve

requirements,the

a.moneysupplywillincrease.

b.moneysupplywilldecrease.*

c.moneysupplywillstaythesame.

d.twotoolswillworkagainstoneanotherandtheneteffectonthemoneysupplyisuncertain.

45.PrimaryassetsheldbytheFederalReserveare

a.loanstocommercialbanks.

b.U.S.governmentsecurities.*

c.FederalReservenotes.

d.reservedepositsbybanks.

46.PrimaryliabilitiesoftheFederalReserveinclude

a.FederalReservenotes.

b.U.S.governmentsecurities.

c.loanstobanks.

d.reservedepositsbybanks.

e.Bothaandd*

47.Ifmanybanksfail,thisislikelytocausea/an

a.increaseinthecurrency-to-depositratio.

b.increaseinthereserves-to-depositratio.

c.afallinthecurrency-to-depositandreserves-to-depositratios.

d.bothaandb.*

e.noneoftheabove.

48.WiththeinventionofATMmachines,thepublicnowholdslesscurrency.Asaresult,wewould

expecttohaveseen

a.boththeMlandtheM2multiplierstoincreaseovertime.

b.theMlmultipliertoincreasewhiletheM2multipliertodecreaseovertime.

c.theMlmultipliertodecreasewhiletheM2multipliertoincreaseovertime.

d.Noneoftheabove*

49.Thefallinthemoneymultiplierandmoneysuppl