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King: Economics

Chapter 20

Instructions

Answer the following questions and then press 'Submit' to get your score.
Please note: Questions 11-15 relate to the appendix to Chapter 20.

Question 1

Which of the following statements is false?

Question 2

Which of the following would cause a bank to lose reserves?

Question 3

Which of the following statements about money creation by banks is false?

Question 4

Suppose banks desire a ratio of reserves to deposits, r, of 4%. And suppose the public desire a ratio of cash to deposits, d, of 2%. Which of the following is correct?

1. The bank deposit multiplier is 25.
2. The money multiplier is 17.

Question 5

Which of the following statements about the liabilities of UK commercial banks is false?

Question 6

Which of the following statements about the assets of commercial banks in the UK bank is false?

Question 7

Which of the following statements is false?

Question 8

Which of the following would not shift the money demand curve to the right?

Question 9

Which of the following methods of intervention in the money market has not been used in the UK since the 1980s?

Question 10

Suppose the Bank of England reduces Bank Rate. Which of the following statements is false?

Question 11

Which of the following statements about the IS curve is false?

Question 12

Which of the following statements about the LM curve is false?

Question 13

Suppose that at present an economy is at some distance from the equilibrium position where the IS and LM curves intersect, and is on neither the IS curve nor the LM curve. Which of the following most accurately states what will happen?

Question 14

Suppose there is an initial increase in planned investment of £100 billion a year, and suppose the multiplier is four. Which of the following statements is false?

Question 15

Which of the following statements is false?