Answered: RUE OR FALSE 1. The volume of our…

RUE OR FALSE 1. The volume of our money is being regulated by the government and subject to the approval of the president. 2. Barter system was the foremost stage in exchange development.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter28: Monetary Policy And Bank Regulation

Section: Chapter Questions

Problem 18RQ: Explain how to use an open market operation to expand the money supply.

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Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

Question

TRUE OR FALSE

1. The volume of our money is being regulated by the government and subject to the approval of the president.

2. Barter system was the foremost stage in exchange development.

3. Commodity money are still accepted nowadays in selected urban areas.

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