Vault cash is not included in the central bank's liability category of currency because:
A. vault cash is in the asset category of reserves.
B. vault cash really is only electronic funds.
C. only non-bank currency is in the liability category of currency.
D. it is the liability of the U.S. Treasury.
Answer: C
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The Fed in the U.S
A) allows a flexible exchange rate, though their actions can impact the exchange rate. B) has no influence on the exchange rate. C) sells U.S. dollars to China in an attempt to depreciate the U.S. dollar. D) alternates between a flexible, fixed, and crawling peg exchange rate policy depending on economic conditions.
In comparing growth rates of money growth and inflation across countries, the long-run proposition of the quantity theory of money is supported
Indicate whether the statement is true or false
If the central bank can act as a lender of last resort during a banking panic, banks can
A) encourage the public to borrow directly from the central bank, and this will worsen the banking panic. B) satisfy customer withdrawal needs and eventually restore the public's faith in the banking system. C) borrow more and more money from the central bank, and this will lower its reserves and decrease the public's faith in the banking system. D) call in their loans to their customers and eventually restore the public's faith in the banking system.
A society is saving lives (productively) efficiently if
a. there are no unemployed resources in the health care sector b. there are no unemployed resources anywhere in the economy c. there is no way to save more lives d. there is no way to save more lives without sacrificing some other goods or services e. the opportunity cost of saving one more life is zero