Copyright
CSET Business Subtest II (176): Practice & Study Guide  /  Business Courses

Test Prep Plan - Take a practice test

Take this practice test to check your existing knowledge of the course material. We'll review your answers and create a Test Prep Plan for you based on your results.
How Test Prep Plans work
1
Answer 50 questions
Test your existing knowledge.
2
View your test results
Based on your results, we'll create a customized Test Prep Plan just for you!
3
Study smarter
Study more effectively: skip concepts you already know and focus on what you still need to learn.

CSET Business - Macroeconomics: Money, Federal Reserve System & Banking Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. According to the T-account shown, if the required reserve ratio is 10%, what is the maximum amount of additional loans this bank can make?

Question 2 2. If banks have excess reserves of $5,000, and the money supply increased by $20,000, what is the reserve ratio?

Question 3 3. When economists illustrate the money market, the demand curve is _____ while the supply curve is _____.

Question 4 4. Because the central bank controls the money supply, it also controls what other economic driver?

Question 5 5. What happens when money demand increases and all other things remain constant?

Page 2

Question 6 6. Assume that the marginal propensity to consume is 0.9. What is the maximum amount that real GDP could change if government expenditures increase by $1 billion?

Question 7 7. If the nominal gross domestic product is $6 trillion and the money supply is $2 trillion, assuming a constant price level, the velocity of money is

Question 8 8. What happens if the Federal Reserve sells a large amount of government securities in the open market?

Question 9 9. What does it mean if everything in an economy can be quoted in terms of money?

Question 10 10. How do banks make money?

Page 3

Question 11 11. Assume that there are two parties to an exchange and that they value the goods they would receive as much as the goods they would give away. What do economists call this?

Question 12 12. Lydia deposits $70,000 into the First National Bank of Ceelo. The required reserve ratio is 10%. How much will the money supply increase if the bank loans out excess reserves?

Question 13 13. How does high economic output lead to higher nominal interest rates?

Question 14 14. If $100 of new private investment gets added to the economy, and the marginal propensity to consume is 0.80, by how much will aggregate demand increase?

Question 15 15. The demand for money will fall when

Page 4

Question 16 16. Why was money created?

Question 17 17. Besides being known as the reserve ratio, what is the fraction of a customer's deposits that a bank is required to hold in reserve also called?

Question 18 18. Which of the following insures that the US dollar maintains its value?

Question 19 19. According to the quantity theory of money, increasing the money supply will lead to what?

Question 20 20. What are some of the objectives of the Fed?

Page 5

Question 21 21. What is the economics model that describes the demand and supply of money in a nation called?

Question 22 22. As the price level decreases, how is the value of money impacted?

Question 23 23. $10,000 gets deposited into the Ceelo First National Bank. As a result, excess reserves go up by $8,000. This means that the required reserve ratio must be:

Question 24 24. Which of the following statements is FALSE about the monetary tools of the Federal Reserve?

Question 25 25. Which of these is TRUE regarding money demand and price level?

Page 6

Question 26 26. How would buying or selling government bonds affect the federal funds rate, if it was the government that initiated the sale?

Question 27 27. Which of the following is an inaccurate description of The Federal Reserve?

Question 28 28. Monetarism is the economic viewpoint that states which of the following?

Question 29 29. Which of the following is NOT true regarding the role of banks in the economy?

Question 30 30. A bank gets a demand deposit of $50,000. If the reserve requirement is 10%, what is the maximum the bank can loan out at this time?

CSET Business - Macroeconomics: Money, Federal Reserve System & Banking Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Support