unit 4 macro quiz (miller) Q&A

unit 4 macro quiz (miller) Q&A all of the following are true regarding money except - answers-b. commodity money is used more than fiat money today which of the following is true regarding the balance sheet of a commercial bank ? - answers-c. demand deposits are considered a liability which of the following best explains why the money demand curve is downward sloping ? - answers-c. higher interest rates encourage people to exchange money for other interest-bearing assets a decrease in the supply of money will cause which of the following ? - answers-a. an increase in nominal interest rates which of the following is the best example of fractional deserve banking ? - answers-d. a bank lends out $5000 of its excess reserves the required reserve ratio is 10% and the central bank sells $2 million in bonds to banks. if banks loan out all their excess reserves and there are no leakages, what will happen to the money supply ? - answers-c. it will decrease by $20 million suppose that all banks hold no excess reserves and the reserve requirement is 20%. if paula deposits $200 that she earned for babysitting in the bank, what is the maximum increase in the total money supply ? - answers-c. $800 which of the following is true regarding the central bank's use of open market operations ? - answers-d. interest rates will decrease when the central bank buys bonds which of the following is an appropriate monetary policy used by a central bank to reduce inflation ? - answers-e. selling government securities...