Money and Banking Pts. The FED Money Demand Money Supply Money Functions Monetary Policy 5 10 15 20 25.

Money and Banking

Pts.The FED

Money Demand

Money Supply

Money Functions

Monetary Policy

5

10

15

20

25

5 Points

• Authority to appoint the Federal reserve Chair?

That’s right!

• Who is the President?

5 Points

• The type of demand needed to purchase goods and services in the economy.

That’s right!

• What is transactional demand?

5 Points

• Currency is a part of M1, M2 and/or M3. Which one or combination?

That’s right!

• All three?

5 Points

• The three primary tools the FED has to increase or decrease the money supply..

That’s right!

• Open market operations

• Discount rate

• Required reserve ratio

5 Points

• The type of function money serves when you purchase a new car.

That’s right!

• Medium of Exchange

10 Points

• Current FED Chair

That’s right!

• Who is Ben Bernanke?

10 Points

• This type of demand for money varies inversely with interest rates.

That’s right!

• What is asset demand?

10 Points

• The position of the money supply curve.

That’s right!

• What is Vertical?

10 Points

• When you put money into a savings account you are using money as this.

That’s right!

• What is a store of value?

10 Points• The FED should do this in its open market

operations if it wants to get us out of a recession.

That’s right!

• What is buy bonds?

15 Points

• How many federal reserve banks there are in the U.S.

That’s right!

• What is 12?

15 Points

• If NGDP increased we would expect this to happen to the money demand curve.

That’s right!

• What is shift right?

15 Points

• The more common name for demand deposits.

That’s right!

• What are checking accounts?

15 Points

• When you are a contestant on the price is right and you are guessing the value of a can of peas you are using money as this.

That’s right!

• What is a unit of account?

15 Points

• The impact an easy monetary policy has on Investment spending.

That’s right!

• What is increases it?

20 Points

• The primary committee responsible for buying and selling government securities.

That’s right!

• What is the federal open market committee?

20 Points

• If the government decrease spending on public works projects we would expect this to happen to the money demand curve.

That’s right!

• What is shift left?

20 Points

• The type of money that is easily convertible into M1.

That’s right!

• What is near monies?

20 Points

• The term that describes money that is not backed by gold or silver but backed by the faith of the U.S. government and its citizens.

That’s right!

• What is Fiat Money?

20 Points

• The impact of a tight monetary policy on Aggregate Demand.

That’s right!

• What is shift it to the left?

25 Points

• The committee that is in charge of setting the Discount rate and the Required Reserve Ratio.

That’s right!

• What is the Board of Governors?

25 Points

• The type of relationship fiscal policy and money demand have.

That’s right!

• What is direct?

25 Points• Which of the following are NOT a part of

M2: Cash, Currency, savings accounts, stocks, credit cards. HINT there is more than one answer.

That’s right!

• What are stocks and credit cards?

25 Points

• The official name of paper currency as it is printed.

That’s right!

• What are Federal Reserve Notes?

25 Points

• The appropriate monetary policy response to fiscal crowding out.

That’s right!

• What is increase the money supply?

Click here for final Jeopardy

Final Jeopardy

The final Jeopardy Question is :

1. Describe the sequence of an easy monetary policy. What are its effects on i-rates, Investment, AD, and RGDP. Additionally, what is the canceling potential and the effect on net exports?

Dm

InvestmentDemand

10

8

6

0

10

8

6

0

Monetary Policy and Equilibrium GDPMonetary Policy and Equilibrium GDP

AD1 AD2 AD3

Sm1

AS

P1

Sm2

P2

Sm3

P3

Pri

ce le

vel

Rea

l rat

e of

inte

rest

, i

Real domestic output, GDP

Quantity of money demanded and supplied Amount of planned investment, I

RiR

MEI

Long Run Effects:1. Increased planned investment will lead to increased AS2. i down = international $ down, X up3. Canceling effect: AD up, MD up, i up, and I down, = AD down