What components make up the M1 money supply?

Exploring Money and the Money Supply in Fractional Reserve Banking

Interactive Video
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Social Studies
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6th - 10th Grade
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Hard

Liam Anderson
FREE Resource
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10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Currency and demand deposits
Stocks and bonds
Real estate
Gold reserves
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How do banks influence the money supply through their actions?
By modifying the reserve ratio
By changing interest rates
All of the above
By issuing or recalling loans
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary function of bank reserves?
To pay bank employees
To invest in the stock market
To be kept on hand for withdrawals
To purchase real estate
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of a bank's balance sheet?
To track the bank's profits
To list the bank's employees
To track the bank's assets and liabilities
To advertise the bank's services
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does the fractional reserve banking system require banks to do?
Lend out a fraction of deposits
Keep all deposits in reserve
Invest a fraction of deposits in government bonds
Keep a fraction of deposits in reserve
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the reserve ratio?
The interest rate on loans
The percentage of deposits that must be kept as reserves
The ratio of assets to liabilities
The ratio of loans to deposits
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are excess reserves?
Funds used to pay bank bonuses
Government-issued funds for emergency bailouts
Reserves beyond the required minimum that can be loaned out
Deposits made by the bank's largest customers
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