Money and Banking Drill 1

The three classic functions of money are:

M1, the narrowest common money measure, includes:

In fractional-reserve banking, banks:

If the required reserve ratio is 10%, the simple money multiplier is:

A bank receives a $5,000 deposit with a 20% reserve requirement. Its maximum new lending from this deposit is:

When a bank makes a loan, the money supply:

The money multiplier is smaller in practice than 1/rr because:

The quantity theory of money is summarized by:

According to the quantity theory with stable velocity, 6% money growth and 2% real GDP growth implies inflation of about:

Hyperinflations have historically been stopped most reliably by: