Transcript of Money and Banking Pts. The FED Money Demand Money Supply Money Functions Monetary Policy 5 10 15 20...
Money and Banking
Pts.The FED
Money Demand
Money Supply
Money Functions
Monetary Policy
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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
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8
6
0
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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