Macroeconomics ECON 2301 Fall 2009 Marilyn Spencer, Ph.D. Professor of Economics Review of Chapters 15, 16 & 19

Third Exam: December points possible Miller’s Chapters 15, 16 & 19  25 multiple choice questions, worth 4 points each (100 points total) Will need to write an bubble in your name & ID# Will need to place answers on Scantron bubble sheet, along with your name, ID#, course & section #’s

Test Resources Used Please check any applicable box concerning "fees" for test resources you plan to use DURING the exam:  3x5 card with notes, 5 test points  textbook and notebook, 15 test points  information from others,100 test points  Will NOT use additional resources* * Two (2) points will be added to your score if you choose to NOT use any of these test resources. Name (please print):____________________ ID #:______________________ Signature: ___________________________

ÜFour major functions of money ÜIf something acts as money, what properties it must have ÜCommodity money v. fiduciary money ÜImportance and major role of financial intermediaries ÜFederal Reserve System (Fed) Major components Major responsibilities Reserves: legal, required & excess resserves ÜFederal Deposit Insurance Corporation ÜMoral hazard in the context of financial intermediaries Chapter 15 Exam Question Topics:

 Fractional reserve banking The effect of a new deposit (or withdrawal) on a single bank’s ability to make loans The effect of a new deposit from outside the banking system on the amount of money in the banking system Formula for the maximum money (deposit expansion) multiplier – and how to use that formula  Three tools of monetary policy & how/why the Fed conducts expansionary (or contractionary) monetary policy  Federal Funds Market/Federal Funds Rate  Fed as “lender of last resort”  Relationship between bond price & bond yield (% interest)  Federal Deposit Insurance Chapter 16 Exam Question Topics:

 Economic growth  Per capita rate of economic growth  Economic freedom  Relationship between economic growth and economic freedom  World Bank Primary objectives/responsibilities Problems of moral hazard and adverse selection  International Monetary Fund Primary objectives/responsibilities Least often used tool  Foreign direct investment  Federal Deposit Insurance Chapter 19 Exam Question Topics:

Good Luck!!!