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- 1. Open EndedThe use of money and credit controls to achieve macroeconomic goals is
- 2. Open EndedMonetary policy involves the use of money and credit controls to
- 3. Open EndedThe primary method for controlling the money supply in the United States is to limit the
- 4. Fill in the BlankThe government uses ______________ to regulate the amount of money banks lend
- 5. Open EndedAll of the following would be true for the banking system if there was no government regulation except
- 6. Open EndedThe creation of a Federal Reserve System was recommended by
- 7. Open EndedThe Federal Reserve System was created by
- 8. Open EndedWhich of the following serves as the central banker for private banks in the United States?
- 9. Open EndedThe Federal Reserve holds deposits from
- 10. Open EndedRegional Fed banks
- 11. Open EndedWhich of the following services is performed by the regional Federal Reserve banks?
- 12. Open EndedWhich of the following services is performed by the regional Federal Reserve banks?
- 13. Open EndedSuppose Brian receives a check for $100 from a bank in Atlanta. He deposits the check in his account at a Dallas bank. The Dallas bank will most likely collect the $100 directly from the
- 14. Open EndedRegional Fed banks are responsible for all of the following except
- 15. Open EndedMonetary policy is set by the
- 16. Open EndedThe Board of Governors consists of
- 17. Open EndedMembers of the Board of Governors are
- 18. Open EndedWhich of the following is not true for members of the Federal Reserve Board of Governors?
- 19. Open EndedWhich of the following provides evidence that the Federal Reserve System is politically insulated?
- 20. Open EndedMembers of the Federal Reserve Board of Governors are appointed for one 14-year term so that they
- 21. Open EndedThe Federal Open Market Committee includes
- 22. Open EndedThe current chairman of the Federal Reserve is
- 23. Open EndedWhich of the following is responsible for the Fed's daily activity in financial markets?
- 24. Open EndedThe Federal Open Market Committee meets
- 25. Open EndedThe Federal Open Market Committee is responsible for
- 26. Open EndedWhich of the following is responsible for buying and selling government securities to influence reserves in the banking system?
- 27. Open EndedThe money supply (M1) includes currency held by the public plus
- 28. Open EndedCurrency held by the public plus balances in transactions accounts plus travelers checks is the definition of
- 29. Open EndedThe M2 money supply is defined as
- 30. Open EndedThe money supply (M2) includes M1 plus balances in
- 31. Open EndedAll of the following are tools available to the Fed for controlling the money supply except
- 32. Open EndedThe minimum amount of reserves a bank is required to hold is
- 33. Fill in the BlankThe Fed can use all of the following except ____________ to change the lending capacity of the banking system.
- 34. Fill in the Blank_____________ can be altered to change the lending capacity of the banking system.
- 35. Open EndedExcess reserves are
- 36. Open EndedWhich of the following represents the money multiplier?
- 37. Open EndedWhich of the following represents the lending capacity of an individual (nonmonopoly) bank?
- 38. Open EndedWhich of the following represents the lending capacity of an entire banking system?
- 39. Open EndedAssume the reserve requirement is 10 percent, demand deposits are $200 million, and total reserves are $18 million. If the reserve requirement is increased to 14 percent, the banking system will have
- 40. Open EndedAssume the reserve requirement is 25 percent, demand deposits are $500 million, and total reserves are $32 million. If the reserve requirement is decreased to 20 percent, the banking system will experience
- 41. Open EndedSuppose the banks in the Federal Reserve System have $100 billion in transactions accounts, the required reserve ratio is 0.10, and there are no excess reserves in the system. If the required reserve ratio is changed to 0.15, the deficiency of reserves would be
- 42. Open EndedSuppose the banks in the Federal Reserve System have $200 billion in transactions accounts, the required reserve ratio is 0.15, and there are no excess reserves in the system. If the required reserve ratio is changed to 0.10, the amount of excess reserves would be
- 43. Open EndedSuppose all of the banks in the Federal Reserve System have $500 billion in transactions accounts, the required reserve ratio is 0.30, and there are no excess reserves in the system. If the required reserve ratio is changed to 0.25, the total lending capacity of the system is increased by
- 44. Open EndedA change in the reserve requirement causes a change in all of the following except
- 45. Open EndedChanging the reserve requirement is
- 46. Open EndedThe federal funds rate is the interest rate charged when
- 47. Open EndedWhich of the following is the market where reserves can be borrowed by one bank from another bank for very short periods of time?
- 48. Open EndedIf excess reserves are too large, a bank is likely to
- 49. Open EndedIf banks do not have enough reserves to satisfy the reserve requirement, they can
- 50. Open EndedIf a bank does not have enough reserves to satisfy the reserve requirement, it is likely to do any of the following except
- 51. Open EndedThe rate of interest charged by Federal Reserve banks for lending reserves to member banks is the
- 52. Open EndedDiscounting refers to the Fed's practice of
- 53. Open EndedWhich of the following is true about an increase in the discount rate?
- 54. Open EndedWhen the Fed raises the discount rate, all of the following result except
- 55. Open EndedA reduction in the discount rate
- 56. Open EndedWhen a bank borrows money from the Federal Reserve,
- 57. Open EndedBy raising and lowering the discount rate, the Fed changes the
- 58. Open EndedWhich of the following is the principal mechanism used by the Federal Reserve to directly alter the reserves of the banking system?
- 59. Open EndedThe Fed is most likely to pursue
- 60. Open EndedWhich of the following is the tool used most frequently by the Fed?
- 61. Open EndedThe choice of how and where to hold idle funds is
- 62. Open EndedThrough open market operations, the Fed is able to influence
- 63. Open EndedWhen the Fed wishes to increase the reserves of the member banks, it
- 64. Open EndedWhen the Fed buys bonds from the public, it
- 65. Open EndedA bond is a
- 66. Open EndedJanette buys a bond in the amount of $500 with a promised interest rate of 15 percent. If the market interest rate decreases to 5 percent, Janette can sell her bond for up to
- 67. Open EndedAnil buys a bond in the amount of $2,000 with a promised interest rate of 17 percent. If the market interest rate increases to 27 percent, Anil can sell his bond for up to
- 68. Open EndedShoffner buys a bond in the amount of $1,000 with a promised interest rate of 18 percent. If the market interest rate decreases to 3 percent, Shoffner can sell his bond for up to
- 69. Open EndedThe rate of return on a bond is the
- 70. Open EndedWhich of the following equals the current yield on a bond?
- 71. Open EndedIf the annual interest rate printed on the face of a bond is 12 percent, the face value of the bond is $1,000, and the current market price of the bond is $1,200, what is the current yield on the bond?
- 72. Open EndedIf the annual interest rate printed on the face of a bond is 7 percent, the face value of the bond is $1,000, and the current market price of the bond is $250, what is the current yield on the bond?
- 73. Open EndedIf the annual interest rate printed on the face of a bond is 25 percent, the face value of the bond is $1,000, and the current market price of the bond is $700, what is the current yield on the bond?
- 74. Open EndedIf the annual interest rate printed on the face of a bond is 16 percent, the face value of the bond is $1,000, and the current market price of the bond is $200, what is the current yield on the bond?
- 75. Open EndedThe purchase and sale of government bonds by the Fed for the purpose of altering bank reserves is known as
- 76. Open EndedOpen market operations involve the Fed
- 77. Open EndedIf the Fed wants to sell more government bonds than people are willing to buy, then the Fed
- 78. Open EndedIf market interest rates rise, the selling price of existing bonds in the market will, ceteris paribus,
- 79. Open EndedIf market interest rates fall, the selling price of existing bonds in the market will, ceteris
- 80. Open EndedThe Fed can decrease the federal funds rate by
- 81. Open EndedThe Fed can increase the federal funds rate by
- 82. Open EndedIf the Federal Reserve buys government bonds from the public
- 83. Open EndedIn order to increase the money supply, the Fed can
- 84. Open EndedSuppose the Federal Reserve System has a required reserve ratio of 0.10 and there are no excess reserves in the system. If the Open Market Committee buys $50 million of securities from the commercial banking system, the total lending capacity for the system
- 85. Open EndedSuppose the Federal Reserve System has a required reserve ratio of 0.20 and there are no excess reserves in the system. If the Open Market Committee buys $20 million of securities from the commercial banking system, the total lending capacity of the system
- 86. Open EndedIf the Fed buys $25 billion of U.S. bonds in the open market and the reserve requirement is 20 percent, M1 will eventually
- 87. Open EndedIf the Fed buys $32 billion of U.S. bonds in the open market and the reserve requirement is 10 percent, M1 will eventually
- 88. Open EndedIf the Fed buys $20 billion of U.S. bonds in the open market and the reserve requirement is 5 percent, M1 will eventually
- 89. Open EndedA growing economy needs a
- 90. Open EndedIf the Fed wishes to reduce the money supply, it can do all of the following except
- 91. Open EndedIn order to decrease the money supply, the Fed can
- 92. Open EndedSuppose the Federal Reserve System has a required reserve ratio of 0.20. If the Open Market Committee sells $10 billion of securities to the commercial banking system, then before the money multiplier takes effect, initially excess reserves
- 93. Open EndedWhich of the following is not required to satisfy Fed minimum reserve requirements?
- 94. Open EndedWhich of the following does not reduce the Fed's control of the money supply?
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