The University of Adelaide - ECON 7200 quiz 10. Marked and Graded A. Contains review

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The University of Adelaide - ECON 7200 quiz 10 Robba Bank has $500 million in deposits, and is meeting its usual reserve ratio and has no excess liquidity. It has $125 million in liquid assets. Rob... ba Bank therefore has a reserve ratio of: The Reserve Bank Board comprises: According to the Reserve Bank of Australia, inflation targeting refers to monetary policy that aims to: The Reserve Bank of Australia manages the supply of cash on a daily basis to: If the Reserve Bank of Australia wants to increase interest rates, it will: If the Reserve Bank of Australia sells bonds and securities in the open market, this is likely to lead to a: If the Reserve Bank of Australia buys bonds and securities in the open market, this is likely to lead to a: When the Reserve Bank of Australia raises the cash rate, this normally leads to: M1 includes: A decrease in the real interest rate will: When a grocery store accepts your $10 note in exchange for bread and milk, this illustrates that the $10 note is serving as a: A financial intermediary's main function is to match ________ with excess funds to ________ who want to borrow funds. Assume that banks become more conservative in their lending policies, and start holding some excess liquid assets. Compared to a situation in which banks are not holding excess reserves, the size of the deposit multiplier will be: If the Reserve Bank of Australia raises the interest rate, this will ________ inflation and ________ the rate of growth of real GDP in the short run. A decrease in real GDP can: Credit cards are considered: If you save $3000 for a deposit on a new car, you are using money as a: If banks do not loan out all their excess reserves, then the real world multiplier is: If during a deposit expansion, not all money is re-deposited into the banking system and some leaks out as currency, then the real world multiplier is: If the reserve ratio is 0.05 then the simple deposit multiplier is: The simple deposit multiplier is the ratio of the amount of: A decrease in the supply of cash on the overnight money market will lead to a: Which of the following describes what the Reserve Bank of Australia would do to pursue an expansionary monetary policy? Money demand will increase if the price level ________ or if real GDP ________. Which of the following does the Reserve Bank of Australia use as its main measure of monetary movements in Australia? Refer to Table 16.2 for the following question(s). Table 16.2 Consider the hypothetical information in Table 16.2 for potential GDP, real GDP and the price level in 2012 and in 2013 if the Reserve Bank of Australia does not use monetary policy. If the RBA uses monetary policy successfully to keep real GDP at its potential level in 2013, which of the following will be lower than if the RBA had taken no action? Consider the hypothetical information in Table 16.2 for potential GDP, real GDP and the price level in 2012 and in 2013 if the Reserve Bank of Australia (RBA) does not use monetary policy. If the RBA wants to keep real GDP at its potential level in 2013, it should: The cash rate is the interest rate: Assume that some people who receive bank loans do not deposit the full amount of the loan into a bank. This will cause the deposit multiplier to be ________ it would have been if all loans are deposited in banks. The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects. In the model of the market for loanable funds, which of the following will not shift the demand curve for loanable funds? In the model of the market for loanable funds, which of the following will not shift the supply curve for loanable funds? From an initial long-run macroeconomic equilibrium, if the Reserve Bank of Australia anticipated that next year aggregate demand would grow significantly slower than long-run aggregate supply, then the RBA would most likely: A person's wealth: Equilibrium in the loanable funds market determines the: If the Reserve Bank of Australia buys financial securities, this: When banks gain ________, they can ________ their loans; and the money supply ________. If the Reserve Bank of Australia pursues expansionary monetary policy, ceteris paribus, aggregate demand will: The Reserve Bank of Australia can increase the cash rate by: The Reserve Bank of Australia's main monetary policy target is: The reserves of a bank: Refer to the Figure 16.6 for the following question. Refer to Figure 16.6. In this figure, suppose the economy in Year 1 is at point A and expected in Year 2 to be at point B. Which of the following policies could the Reserve Bank of Australia use to move the economy to point C? If contractionary monetary policy is used, which of the following would be most likely to enhance the effect of the contractionary policy on aggregate demand? A government budget deficit will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________. Rising prices erode the value of money as a ________ and a ________. The effect of monetary policy on long-term interest rates is usually: Monetary policy targets the: Open market operations occur when the Reserve Bank of Australia:   If firms are anticipating that the profitability of new investments will be lower in the future, then the ________ curve for loanable funds will shift to the ________. Refer to Table 16.1 for the following question. Table 16.1 Refer to Table 16.1. Consider the hypothetical information in the table for potential GDP, real GDP and the price level in 2012 and in 2013 if the Reserve Bank of Australia does not use monetary policy. If the Reserve Bank of Australia wants to keep real GDP at its potential level in 2013, it should: An increase in the real interest rate does which of the following? Liquidity is defined as the ease with which a given asset can be converted to a: Which of the following are part of a bank's assets? Increases in the price level: If interest rates rise, this will: The ________ the reserve ratio, the ________ the simple deposit multiplier. The majority of intervention into financial markets by the Reserve Bank of Australia is to: The demand for loanable funds has a ________ slope because the lower the interest rate, the ________ number of investment projects are profitable, and the ________ the quantity of loanable funds demanded. Which one of the following is not considered a financial intermediary? If real GDP decreases: In which of the following situations would the Reserve Bank of Australia conduct contractionary monetary policy? Which of the following characterises the ability of the Reserve Bank of Australia (RBA) to prevent recessions? Which of the following criteria would make gold a poor medium of exchange? The supply of loanable funds has a ________ slope because the greater the interest rate, the ________ the reward to savings, and the ________ the quantity of loanable funds supplied. Refer to Figure 16.3 for the following question(s). Refer to Figure 16.3. Beginning at equilibrium, if the government budget deficit rises, which of the following would you expect to see? Refer to Figure 16.4 for the following question. Refer to Figure 16.4. In this figure, suppose the economy in Year 1 is at point A and expected in Year 2 to be at point B. Which of the following policies could the Reserve Bank of Australia use to move the economy to point C? The overnight cash rate is determined: Not all households are net borrowers. For households that are net lenders, an increase in interest rates will: In World War II, cigarettes were used as money in some prisoner of war camps. Given this, we would expect to see: A unit of account is: Banks can increase the money supply by: Many international trade contracts are denominated in United States dollars, regardless of the currencies of the countries that are trading with each other. This is an example of money serving as a: If expansionary monetary policy is used, then which of the following would be most likely to enhance the effect of the expansionary policy on aggregate demand? If you spend more of your income on consumption goods, which of the following will occur? The portion of ________ that a bank does not loan out or spend on securities is known as ________. Which of the following are goals of monetary policy? Which of the following is used by the Reserve Bank of Australia as the main measure of monetary movements in Australia? Which of the following is not true about monetary policy? If you transfer all of your currency to your demand deposit account, then initially, M1 will ________ and M3 will ________. The money market model is concerned with ________ and the loanable funds market model is concerned with ________. If the Reserve Bank of Australia lowers its target for the cash rate, this indicates that it is: The money demand curve is downward sloping because: Refer to Figure 16.2 for the following question. Refer to Figure 16.2. In this figure, a movement from point A to point B would be caused by: Suppose you deposit $2000 into a bank that has a reserve ratio of 0.1. How does this initially affect the bank's balance sheet? The liquidity property of money is the property that makes money: A cash withdrawal from the banking system: Assuming that all else remains constant, contractionary monetary policy causes aggregate demand to: The money supply curve would be vertical if: Under the current operation of monetary policy in Australia, the money supply is: A farm worker gets paid today in money, but waits to spend the money until next week. Which function of money does this illustrate? The key to having the citizens in an economy accept something as money is: [Show More]

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