6. Which of the following is NOT a criterion for good money? C. Hard to counterf
ID: 1127424 • Letter: 6
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6. Which of the following is NOT a criterion for good money? C. Hard to counterfeit D. Portable A. Divisible B. Durable E. With intrinsic value 7. What is the net worth of this bank? Liabilities Assets Reserves20 Deposits 50 Required reserves =5 | Borrowing = 5 Excess reserves = 15 Loans = 25 Property = 5 Securities = 10 Net worth = ? A. 25 B. 15 C. S D. 0 E. -10 8. If a borrower defaults on a l oan (amoun5), and the bank takes over the collateral (with a value of 3 will the bank's new net worth be? Assets Liabilities Reserves = 20 Loans = 65 Property = 5 Securities = 15 Deposits = 100 Net worth = 5 A. 7 B. 5 C. 3 . 2 E. Not enough information given 9. Which of the following functions do the Federal Reserve Banks perform? A. Clear checks between private banks B. Provide currency to private banks C. Provide private banks with loans D. Both A and B E. A, B, and C If nominal GDP increases, what happens to the demand for money (all else being equal)? It increases B. It decreases C. It stays the same D. The Federal Reserve determines the demand for money A.Explanation / Answer
6. E) With intrinsic value
Money is anything that is generally acceptable as a medium of exchange. It is not necessary that money must have some intrinsic value.
7. Net worth = Total assets - Deposits - Borrowings = 80 - 50 - 5 = $ 25
Answer is A) 25
8. D) 2
Net worth = Amount of loan default - Collateral amount = 5 - 3 = 2
9. E) A, B and C
Fed provides credit to banks, provides currency and clears checks.
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