Mishkin - TB - ch14米什金货币金融学题库

8) When a bank sells a government bond to the Federal Reserve, reserves in the banking system ________ and the monetary base ________, everything else held constant. A) increase; increases B) increase; decreases C) decrease; increases D) decrease; decreases Answer: A

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9) When a bank buys a government bond from the Federal Reserve, reserves in the banking system ________ and the monetary base ________, everything else held constant. A) increase; increases B) increase; decreases C) decrease; increases D) decrease; decreases Answer: D

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10) When the Fed buys $100 worth of bonds from First National Bank, reserves in the banking system

A) increase by $100.

B) increase by more than $100. C) decrease by $100.

D) decrease by more than $100. Answer: A

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11) When the Fed sells $100 worth of bonds to First National Bank, reserves in the banking system A) increase by $100.

B) increase by more than $100. C) decrease by $100.

D) decrease by more than $100. Answer: C

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12) If a person selling bonds to the Fed cashes the Fed's check, then reserves ________ and currency in circulation ________, everything else held constant. A) remain unchanged; declines B) remain unchanged; increases C) decline; remains unchanged D) increase; remains unchanged Answer: B

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13) The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the proceeds are kept in ________, the open market purchase has no effect on reserves; if the proceeds are kept as ________, reserves increase by the amount of the open market purchase.

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A) deposits; deposits B) deposits; currency C) currency; deposits D) currency; currency Answer: C

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14) The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the proceeds are kept in currency, the open market purchase ________ reserves; if the proceeds are kept as deposits, the open market purchase ________ reserves.

A) has no effect on; has no effect on B) has no effect on; increases C) increases; has no effect on D) decreases; increases Answer: B

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15) When an individual sells a $100 bond to the Fed, she may either deposit the check she receives or cash it for currency. In both cases A) reserves increase.

B) high-powered money increases. C) reserves decrease.

D) high-powered money decreases. Answer: B

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16) If a member of the nonbank public sells a government bond to the Federal Reserve in exchange for currency, the monetary base will ________, but ________. A) remain unchanged; reserves will fall B) remain unchanged; reserves will rise

C) rise; currency in circulation will remain unchanged D) rise; reserves will remain unchanged Answer: D

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17) If a member of the nonbank public purchases a government bond from the Federal Reserve in exchange for currency, the monetary base will ________, but reserves will ________. A) remain unchanged; rise B) remain unchanged; fall C) rise; remain unchanged D) fall; remain unchanged Answer: D

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18) For which of the following is the change in reserves necessarily different from the change in the monetary base?

A) Open market purchases from a bank

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B) Open market purchases from an individual who deposits the check in a bank C) Open market purchases from an individual who cashes the check D) Open market sale to a bank Answer: C

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19) When a member of the nonbank public withdraws currency from her bank account, A) both the monetary base and bank reserves fall. B) both the monetary base and bank reserves rise.

C) the monetary base falls, but bank reserves remain unchanged. D) bank reserves fall, but the monetary base remains unchanged. Answer: D

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20) When a member of the nonbank public deposits currency into her bank account, A) both the monetary base and bank reserves fall. B) both the monetary base and bank reserves rise.

C) the monetary base falls, but bank reserves remain unchanged. D) bank reserves rise, but the monetary base remains unchanged. Answer: D

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21) When the Fed extends a $100 discount loan to the First National Bank, reserves in the banking system

A) increase by $100.

B) increase by more than $100. C) decrease by $100.

D) decrease by more than $100. Answer: A

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22) All else the same, when the Fed calls in a $100 discount loan previously extended to the First National Bank, reserves in the banking system A) increase by $100.

B) increase by more than $100. C) decrease by $100.

D) decrease by more than $100. Answer: C

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23) When the Federal Reserve extends a discount loan to a bank, the monetary base ________ and reserves ________.

A) remains unchanged; decrease B) remains unchanged; increase C) increases; increase

D) increases; remain unchanged Answer: C

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24) When the Federal Reserve calls in a discount loan from a bank, the monetary base ________ and reserves ________.

A) remains unchanged; decrease B) remains unchanged; increase C) decreases; decrease

D) decreases; remains unchanged Answer: C

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25) If the Fed decides to reduce bank reserves, it can A) purchase government bonds. B) extend discount loans to banks. C) sell government bonds. D) print more currency. Answer: C

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26) There are two ways in which the Fed can provide additional reserves to the banking system: it can ________ government bonds or it can ________ discount loans to commercial banks. A) sell; extend B) sell; call in

C) purchase; extend D) purchase; call in Answer: C

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27) A decrease in ________ leads to an equal ________ in the monetary base in the short run. A) float; increase B) float; decrease

C) Treasury deposits at the Fed; decrease D) discount loans; increase Answer: B

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