Question 1

There are __________ Federal Reserve Districts.

Accepted Answer

A)   seven
B)   eleven
C)   twelve
D)   fourteen

Question 2

Suppose the Fed forecasts a reduction in cash leakages.It might offset the effect of this on the money supply by

Accepted Answer

A)   buying government securities.
B)   selling government securities.
C)   lowering the required reserve ratio.
D)   lowering the discount rate.

Question 3

To decrease the money supply,the Fed may

Accepted Answer

A)   buy government securities in the open market.
B)   decrease the discount rate.
C)   increase the required reserve ratio.
D)   b and c
E)   all of the above

Question 4

When Bank A obtains a loan from the Fed,the

Accepted Answer

A)   discount rate is probably higher than the federal funds rate.
B)   bank's reserves increase.
C)   simple deposit multiplier decreases.
D)   b and c
E)   none of the above

Question 5

A bank is less likely to borrow from the central bank when the __________ falls relative to the __________.

Accepted Answer

A)   discount rate;required reserve ratio
B)   excess reserve;required reserves
C)   discount rate;federal funds rate
D)   federal funds rate;discount rate

Question 6

Exhibit 13-1
  (G)  Assume that the required reserve ratio is 10%,that there are no cash leakages,and that banks hold zero excess reserves. -Refer to Exhibit 13-1.Suppose that the Federal Reserve conducts open market operations by purchasing $1,000 worth of government securities from Bank A.At the end of this process of money creation depicted in the exhibit,what is the total amount of new checkable deposits,blank (G) ? A)  $1,000,000 B)  $1,000 C)  $10,000 D)  $100,000" class="answers-bank-image d-inline" rel="preload" > Totals -------------------------> (G) 
Assume that the required reserve ratio is 10%,that there are no cash leakages,and that banks hold zero excess reserves.
-Refer to Exhibit 13-1.Suppose that the Federal Reserve conducts open market operations by purchasing $1,000 worth of government securities from Bank A.At the end of this process of money creation depicted in the exhibit,what is the total amount of new checkable deposits,blank (G) ?

Accepted Answer

A)   $1,000,000
B)   $1,000
C)   $10,000
D)   $100,000

Question 7

The Federal Reserve Bank of Minneapolis once chartered a small airplane to deliver money to a commercial bank that was experiencing a "mad run" on the bank.

Accepted Answer

A) True 
 B)False

Question 8

The simple deposit multiplier is

Accepted Answer

A)   the reciprocal of the required reserve ratio.
B)   always 1.
C)   the same as the required reserve ratio.
D)   different from bank to bank even if the required reserve ratio is the same for all banks.

Question 9

Suppose that the Fed undertakes an open market purchase of $1 million worth of securities from a bank.If the required reserve ratio is 9%,what is the resulting change in checkable deposits (or the money supply) ,assuming that there are no cash leakages and that banks hold zero excess reserves?

Accepted Answer

A)   $11.11 million
B)   $9 million
C)   $1.09 million
D)   $90 million

Question 10

A commercial bank can receive a loan from another commercial bank in the

Accepted Answer

A)   federal funds market.
B)   bank loan market.
C)   Fed market.
D)   discount market.

Question 11

If the Fed wants to decrease the money supply,it can __________ the required reserve ratio,conduct an open market __________,or __________ the discount rate.

Accepted Answer

A)   raise;purchase;lower
B)   lower;purchase;lower
C)   raise;sale;raise
D)   lower;sale;lower
E)   none of the above

Question 12

The interest rate that a commercial bank pays when it borrows from the Fed is the __________ rate.

Accepted Answer

A)   discount
B)   exchange
C)   federal
D)   bank

Question 13

Each of the governors of the Federal Reserve System is appointed for a term of __________ years.The Board of Governors is comprised of _____________ members and the FOMC is comprised of __________ members.

Accepted Answer

A)   12;7;19
B)   14;6;22
C)   6;5;14
D)   14;7;12
E)   12;6;12

Question 14

An open market purchase by the Fed

Accepted Answer

A)   decreases the supply of money.
B)   increases the supply of money.
C)   decreases the demand for money.
D)   increases the demand for money.

Question 15

The term auction facility (TAF) program was instituted by the Federal Reserve to deal with the ________________________.This program gave banks ____________ options when it comes to borrowing from the Fed.

Accepted Answer

A)   financial crisis of 2007-2009;more
B)   Great Depression;more
C)   financial crisis of 2007-2009;fewer
D)   Great Depression;fewer

Question 16

When one commercial bank borrows from another commercial bank,it pays the __________ rate.

Accepted Answer

A)   discount
B)   bank interest
C)   federal funds
D)   prime
E)   none of the above

Question 17

When a bank obtains a loan from the Fed,it follows that the

Accepted Answer

A)   simple deposit multiplier rises.
B)   bank (itself) can create more loans.
C)   bank's reserves decrease.
D)   bank's reserves remain unchanged.
E)   none of the above

Question 18

Discuss in detail the three things mentioned in the text that the Federal Reserve did to deal with the 2007-2009 financial crisis.

Accepted Answer

To deal with the financial crisis of 200...

Question 19

To expand the money supply the Fed could lower the required reserve ratio,lower the discount rate,or purchase government securities.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements is false?

Accepted Answer

A)   The Fed has the legal authority to create money out of thin air.
B)   There is a direct relationship between the money supply and the required reserve ratio.
C)   The Fed can cause money to disappear into thin air.
D)   The federal funds market is a market in which banks can borrow money from other banks.

Exam 13: The Federal Reserve System

Correct Answer
verified

There are __________ Federal Reserve Districts.

Correct Answer
verified

When a bank obtains a loan from the Fed,it follows that the

Correct Answer
verified

Suppose the Fed forecasts a reduction in cash leakages.It might offset the effect of this on the money supply by

Correct Answer
verified

To expand the money supply the Fed could lower the required reserve ratio,lower the discount rate,or purchase government securities.

Correct Answer
verified

Suppose that the Fed undertakes an open market purchase of $1 million worth of securities from a bank.If the required reserve ratio is 9%,what is the resulting change in checkable deposits (or the money supply) ,assuming that there are no cash leakages and that banks hold zero excess reserves?

Correct Answer
verified

The interest rate that a commercial bank pays when it borrows from the Fed is the __________ rate.

Correct Answer
verified

A bank is less likely to borrow from the central bank when the falls relative to the .

Correct Answer
verified

The simple deposit multiplier is

Correct Answer
verified

An open market purchase by the Fed

Correct Answer
verified

The term auction facility (TAF) program was instituted by the Federal Reserve to deal with the ____________.This program gave banks options when it comes to borrowing from the Fed.

Correct Answer
verified

When one commercial bank borrows from another commercial bank,it pays the __________ rate.

Correct Answer
verified

The Federal Reserve Bank of Minneapolis once chartered a small airplane to deliver money to a commercial bank that was experiencing a "mad run" on the bank.

Correct Answer
verified

A commercial bank can receive a loan from another commercial bank in the

Correct Answer
verified

Discuss in detail the three things mentioned in the text that the Federal Reserve did to deal with the 2007-2009 financial crisis.

Correct Answer
verified
To deal with the financial crisis of 200...
View Answer

If the Fed wants to decrease the money supply,it can the required reserve ratio,conduct an open market ,or __ the discount rate.

Correct Answer
verified

Each of the governors of the Federal Reserve System is appointed for a term of ____ years.The Board of Governors is comprised of _ members and the FOMC is comprised of ____ members.

Correct Answer
verified

To decrease the money supply,the Fed may

Correct Answer
verified

Which of the following statements is false?

Correct Answer
verified

When Bank A obtains a loan from the Fed,the

Correct Answer
verified

Exam 13: The Federal Reserve System

Correct AnswerverifiedShow Answer

There are __________ Federal Reserve Districts.

Correct AnswerverifiedShow Answer

When a bank obtains a loan from the Fed,it follows that the

Correct AnswerverifiedShow Answer

Suppose the Fed forecasts a reduction in cash leakages.It might offset the effect of this on the money supply by

Correct AnswerverifiedShow Answer

To expand the money supply the Fed could lower the required reserve ratio,lower the discount rate,or purchase government securities.

Correct AnswerverifiedShow Answer

Suppose that the Fed undertakes an open market purchase of $1 million worth of securities from a bank.If the required reserve ratio is 9%,what is the resulting change in checkable deposits (or the money supply) ,assuming that there are no cash leakages and that banks hold zero excess reserves?

Correct AnswerverifiedShow Answer

The interest rate that a commercial bank pays when it borrows from the Fed is the __________ rate.

Correct AnswerverifiedShow Answer

A bank is less likely to borrow from the central bank when the __________ falls relative to the __________.

Correct AnswerverifiedShow Answer

The simple deposit multiplier is

Correct AnswerverifiedShow Answer

An open market purchase by the Fed

Correct AnswerverifiedShow Answer

The term auction facility (TAF) program was instituted by the Federal Reserve to deal with the ________________________.This program gave banks ____________ options when it comes to borrowing from the Fed.

Correct AnswerverifiedShow Answer

When one commercial bank borrows from another commercial bank,it pays the __________ rate.

Correct AnswerverifiedShow Answer

The Federal Reserve Bank of Minneapolis once chartered a small airplane to deliver money to a commercial bank that was experiencing a "mad run" on the bank.

Correct AnswerverifiedShow Answer

A commercial bank can receive a loan from another commercial bank in the

Correct AnswerverifiedShow Answer

Discuss in detail the three things mentioned in the text that the Federal Reserve did to deal with the 2007-2009 financial crisis.

Correct AnswerverifiedTo deal with the financial crisis of 200...View AnswerShow Answer

If the Fed wants to decrease the money supply,it can __________ the required reserve ratio,conduct an open market __________,or __________ the discount rate.

Correct AnswerverifiedShow Answer

Each of the governors of the Federal Reserve System is appointed for a term of __________ years.The Board of Governors is comprised of _____________ members and the FOMC is comprised of __________ members.

Correct AnswerverifiedShow Answer

To decrease the money supply,the Fed may

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

When Bank A obtains a loan from the Fed,the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A bank is less likely to borrow from the central bank when the falls relative to the .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The term auction facility (TAF) program was instituted by the Federal Reserve to deal with the ____________.This program gave banks options when it comes to borrowing from the Fed.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
To deal with the financial crisis of 200...
View Answer

If the Fed wants to decrease the money supply,it can the required reserve ratio,conduct an open market ,or __ the discount rate.

Correct Answer
verified

Each of the governors of the Federal Reserve System is appointed for a term of ____ years.The Board of Governors is comprised of _ members and the FOMC is comprised of ____ members.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified