5-2 (41-44) Question 41. 41. Money (Points : 5) is a perfect store of value. is

Question

5-2 (41-44)

Question 41. 41. Money (Points : 5) is a perfect store of value. is the most liquid asset. has intrinsic value, regardless of which form it takes. All of the above are correct.

Question 42. 42. Which of the following statements regarding the Federal Open Market Committee is correct? (Points : 5) Only the five voting regional Fed presidents attend the meetings. All regional Fed presidents attend and vote at the meetings. All regional Fed presidents attend the meetings, but only five get to vote. Regional Fed presidents may neither attend nor vote the meetings.

Question 43. 43. If the reserve ratio is 8 percent, then an additional $1,000 of reserves can increase the money supply by as much as (Points : 5) $6,400. $8,000. $12,500. $20,000.

Question 44. 44. The money supply increases when the Fed (Points : 5) lowers the discount rate. The increase will be larger the smaller the reserve ratio is. lowers the discount rate. The increase will be larger the larger the reserve ratio is. raises the discount rate. The increase will be larger the smaller the reserve ratio is. raises the discount rate. The increase will be larger the larger the reserve ratio is.

Explanation / Answer

41) Money is the most liquid asset .It can be used anytime we want.

42)In Federal Open Market Committee , All regional Fed presidents attend the meetings, but only five get to vote.

43)reserve ratio=8%

Money supply=8(1000)=8000$

44)Discount rate is rate charged to commercial banks on borrowing.So money supply increases when discount rate is lower.This increase will be larger ,the larger the reserve ratio is .

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