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Warning: The hard deadline has passed. You can attempt it, but you will not get credit for it. You are welcome to try it as a learning exercise.

This quiz refers to the first two weeks of the class, i.e. Lectures 1-4 and Readings Young and Minsky. Like all quizzes in this course, you can take it a maximum of three times, and only the highest score counts. But the maximum score for the second attempt is 80% and the maximum score for the third attempt is 60%, to encourage you to think before you submit.

In accordance with the Coursera Honor Code, I (KK Fong) certify that the answers here are my own work.

Question 1

With reference to the weekly accounts published by the Fed here, which of the following items best captures the concept of liquidity reserves for the central bank of the United States?

Gold + SDR + foreign currency

Coin

Foreign official accounts

Federal Reserve Notes, or currency

Question 2

What was the major difference between the National Banking System and the Federal Reserve System?

The NB system had greater elasticity because banks were permitted to issue their own notes

The FR system instituted reserve requirements to add discipline to the system

The FR system allowed for greater elasticity of bank reserves

Under the NB system, banks could not hold government bonds as reserves

Question 3

Which of the following statements is NOT an accurate characterization of Minsky's views?

Hedge financed firms have greater cash inflow than cash outflow commitments

Financial regulation is bad for economic growth

A central bank acting as lender of last resort can and should put a floor under financial crisis

Ponzi financed firms have greater cash outflow commitments than cash inflow

Question 4

Why did banks suspend convertibility after Salmon P. Chase withdrew the proceeds of his loan in gold?

Banks could no longer credibly promise to pay out gold to settle foreign balance of payments

Bankers wanted to devalue the dollar in order to profit from foreign exchange holdings

Bankers wanted the remaining gold for themselves in case they needed to flee the country after the war

Bankers wanted to punish the government for tricking them

Question 5

Which of the following statements about Civil War finance is NOT true?

The issue of greenbacks as payment for needed war materials caused an overall increase in aggregate demand, which drove up prices

Uncertainty about the eventual gold parity of the legal tenders caused the dollar exchange rate to fall

Commitment to repay greenbacks at full face value in gold restored business confidence and contributed to postwar boom

Money finance of war was a desperation measure, a last resort not a first resort

Question 6

According to Minsky, a Silicon Valley startup company that expects current spending to exceed current receipts for the next five years is engaged in...

a speculative bet on the future, beyond five years

charity work

printing money

standard business practice

In accordance with the Coursera Honor Code, I (KK Fong) certify that the answers here are my own work.

You cannot submit your work until you agree to the Honor Code. Thanks!

Economics of Money and Banking, Part One

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by Perry G Mehrling

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Economics of Money and Banking, Part One

Economics of Money and Banking, Part Oneby Perry G Mehrling

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Economics of Money and Banking, Part One
by Perry G Mehrling