Money, Banking and the Economy

2406 WordsMar 4, 201310 Pages
California State University Los Angeles Department of Economics Economics 303 Money and Banking and the Economy Prof. Giorgio Canarella Fall Quarter 2012 Midterm 2 Return your work Saturday, November 10, at 1:00 pm Problem (50 points) Use a blue book. You are given the following estimates about the monetary economy of the US: C/D = 0.1; T/D = 2; ER/D = 0.2, [pic], [pic], MB = 1000. Compute the money multiplier, the money supply, the level of currency and checkable deposits, the level of time deposits and excess reserves, and the level of total reserves and required reserves. Use the model of money supply determination discussed in class. Show your work. Multiple Choice Questions (50 points) Use a scantron. 1) As of 2006, about…show more content…
B) established the Federal Reserve System. C) separated commercial banking from investment banking. D) put a tax on the issuance of bank notes by state banks. 13) The Glass-Steagall Act of 1933 13) ______ A) separated commercial banking from investment banking. B) prohibited branching across state lines. C) forbade the opening of nonbank banks. D) made bank holding companies illegal. 14) Regulation Q 14) ______ A) required all banks to hold reserves against demand deposits. B) placed ceilings on allowable interest rates on time and savings deposits. C) prohibited interstate banking. D) broadened the basis on which the Fed could make discount loans. 15) NOW accounts were developed in order to 15) ______ A) provide banks with a liquid, interest-earning asset. B) provide banks with a checkable deposit on which they did not have to pay interest. C) circumvent Regulation Q. D) provide banks with a means of earning interest on the funds in their reserve accounts with the Fed. 16) The British central bank is known as 16) ______ A) the British Federal Reserve. B) the Bank of England. C) the Bank of London. D) the Bank of the Empire. 17) The Japanese central bank is known as 17) ______ A) the Grand Nippon Central Bank. B) the Bank of Japan. C)
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