Banking and Money Creation Quiz

Banking and Money Creation Quiz

Assessment

Interactive Video

Business

11th - 12th Grade

Hard

Created by

Jennifer Brown

FREE Resource

5 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the initial loan amount a bank can make if the reserve requirement is 20% and a $100 deposit is made?

$120

$20

$80

$100

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How is the money multiplier calculated when the reserve requirement is 20%?

20

1/20

1/5

5

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the maximum increase in the money supply when the Federal Reserve buys $5 million worth of bonds?

$5 million

$10 million

$20 million

$25 million

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why doesn't the initial deposit count as new money created in the money supply?

It is already part of the money supply.

It is not loaned out.

It is used for bank operations.

It is held as reserves.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens to real wages when the Federal Reserve implements expansionary monetary policy?

They increase.

They fluctuate randomly.

They decrease.

They remain unchanged.