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Multiple Choice Quiz
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1
Currency issued by a central bank is a liability on the central bank’s balance sheet.
A)True
B)False
2
The Fed attempts to control the money supply primarily by controlling the amount of currency held by the public.
A)True
B)False
3
Other things held constant, an increase in cash withdrawals from banks will cause the monetary base to decrease.
A)True
B)False
4
An increase in the amount of discount loans will cause the Feds assets to increase and its liabilities to decrease.
A)True
B)False
5
An increase in excess reserve holdings by banks will, other things constant, result in a reduction in the money supply.
A)True
B)False





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