Section 5 Test
Mods 22-29
#BGECON
RELEVANT RESOURCES:
Mods 22-29, Activities 34, 35, 36, 37, 38, 41, and 42 and ALL practice Quizzes.
Be able to...
1. Define M1 and its components (Mod 23, A34, P Quiz 23)
2. Calculate the deposit expansion multiplier (Mod 25, A35, A36, and P Quiz 25)
3. Define the role of money for a purchase (Mod 24, A35 and P Quiz 24)
4. Define the federal funds rate (Mod 28, A39, and P Quiz 28)
5. Apply the deposit expansion multiplier to a sum of money (Mods 28 & 29, A37 & A38 and P Quiz 28 & 29)
6. Identify the money market in equilibrium (Mods 28 & 29, A37 & A38 and P Quiz 28 & 29)
7. Calculate excess reserves and how money is created by one bank and the entire system (A37 & A38)
8. Identify the Fed tools used to combat both a recessionary and an inflationary gap (Mods 26 & 27, P Quiz 26 & 27)
9. Identify the cause and effect relationship of the money supply, interest rates, and the economy (White sheet and A42)
10. Define the real interest rate (Mod 29, and A37 & A38, and P Quiz 29)
11. Identify the result of monetary policy in the LONG RUN (Mod 29 and A42)
12. Identify assets and liabilities for a commercial bank and the Fed (A37 & A38)
13. Identify and analyze the loanable funds and the money market graph (Mods 28 & 29, A37 & A38, and P Quiz 28 & 29)
14. Analyze the supply and demand shifts for loanable funds (Mods 28 & 29)
15. Ample vs Limited Reserves