The use of money and credit controls to achieve macroeconomic goals is
2. Open Ended
30 seconds
1 pt
Monetary policy involves the use of money and credit controls to
3. Open Ended
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1 pt
The primary method for controlling the money supply in the United States is to limit the
4. Fill in the Blank
30 seconds
1 pt
The government uses ______________ to regulate the amount of money banks lend
5. Open Ended
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1 pt
All of the following would be true for the banking system if there was no government regulation except
6. Open Ended
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1 pt
The creation of a Federal Reserve System was recommended by
7. Open Ended
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1 pt
The Federal Reserve System was created by
8. Open Ended
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1 pt
Which of the following serves as the central banker for private banks in the United States?
9. Open Ended
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1 pt
The Federal Reserve holds deposits from
10. Open Ended
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1 pt
Regional Fed banks
11. Open Ended
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1 pt
Which of the following services is performed by the regional Federal Reserve banks?
12. Open Ended
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1 pt
Which of the following services is performed by the regional Federal Reserve banks?
13. Open Ended
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1 pt
Suppose 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 Ended
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1 pt
Regional Fed banks are responsible for all of the following except
15. Open Ended
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1 pt
Monetary policy is set by the
16. Open Ended
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1 pt
The Board of Governors consists of
17. Open Ended
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1 pt
Members of the Board of Governors are
18. Open Ended
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1 pt
Which of the following is not true for members of the Federal Reserve Board of Governors?
19. Open Ended
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1 pt
Which of the following provides evidence that the Federal Reserve System is politically insulated?
20. Open Ended
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1 pt
Members of the Federal Reserve Board of Governors are appointed for one 14-year term so that they
21. Open Ended
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1 pt
The Federal Open Market Committee includes
22. Open Ended
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1 pt
The current chairman of the Federal Reserve is
23. Open Ended
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1 pt
Which of the following is responsible for the Fed's daily activity in financial markets?
24. Open Ended
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1 pt
The Federal Open Market Committee meets
25. Open Ended
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1 pt
The Federal Open Market Committee is responsible for
26. Open Ended
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1 pt
Which of the following is responsible for buying and selling government securities to influence reserves in the banking system?
27. Open Ended
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1 pt
The money supply (M1) includes currency held by the public plus
28. Open Ended
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1 pt
Currency held by the public plus balances in transactions accounts plus travelers checks is the definition of
29. Open Ended
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1 pt
The M2 money supply is defined as
30. Open Ended
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1 pt
The money supply (M2) includes M1 plus balances in
31. Open Ended
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1 pt
All of the following are tools available to the Fed for controlling the money supply except
32. Open Ended
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1 pt
The minimum amount of reserves a bank is required to hold is
33. Fill in the Blank
30 seconds
1 pt
The Fed can use all of the following except ____________ to change the lending capacity of the banking system.
34. Fill in the Blank
30 seconds
1 pt
_____________ can be altered to change the lending capacity of the banking system.
35. Open Ended
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1 pt
Excess reserves are
36. Open Ended
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1 pt
Which of the following represents the money multiplier?
37. Open Ended
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1 pt
Which of the following represents the lending capacity of an individual (nonmonopoly) bank?
38. Open Ended
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1 pt
Which of the following represents the lending capacity of an entire banking system?
39. Open Ended
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1 pt
Assume 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 Ended
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1 pt
Assume 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 Ended
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1 pt
Suppose 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 Ended
30 seconds
1 pt
Suppose 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 Ended
30 seconds
1 pt
Suppose 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 Ended
30 seconds
1 pt
A change in the reserve requirement causes a change in all of the following except
45. Open Ended
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1 pt
Changing the reserve requirement is
46. Open Ended
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1 pt
The federal funds rate is the interest rate charged when
47. Open Ended
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1 pt
Which 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 Ended
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1 pt
If excess reserves are too large, a bank is likely to
49. Open Ended
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1 pt
If banks do not have enough reserves to satisfy the reserve requirement, they can
50. Open Ended
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1 pt
If a bank does not have enough reserves to satisfy the reserve requirement, it is likely to do any of the following except
51. Open Ended
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1 pt
The rate of interest charged by Federal Reserve banks for lending reserves to member banks is the
52. Open Ended
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1 pt
Discounting refers to the Fed's practice of
53. Open Ended
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1 pt
Which of the following is true about an increase in the discount rate?
54. Open Ended
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1 pt
When the Fed raises the discount rate, all of the following result except
55. Open Ended
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1 pt
A reduction in the discount rate
56. Open Ended
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1 pt
When a bank borrows money from the Federal Reserve,
57. Open Ended
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1 pt
By raising and lowering the discount rate, the Fed changes the
58. Open Ended
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1 pt
Which of the following is the principal mechanism used by the Federal Reserve to directly alter the reserves of the banking system?
59. Open Ended
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1 pt
The Fed is most likely to pursue
60. Open Ended
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1 pt
Which of the following is the tool used most frequently by the Fed?
61. Open Ended
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1 pt
The choice of how and where to hold idle funds is
62. Open Ended
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1 pt
Through open market operations, the Fed is able to influence
63. Open Ended
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1 pt
When the Fed wishes to increase the reserves of the member banks, it
64. Open Ended
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1 pt
When the Fed buys bonds from the public, it
65. Open Ended
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1 pt
A bond is a
66. Open Ended
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1 pt
Janette 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 Ended
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1 pt
Anil 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 Ended
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1 pt
Shoffner 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 Ended
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1 pt
The rate of return on a bond is the
70. Open Ended
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1 pt
Which of the following equals the current yield on a bond?
71. Open Ended
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1 pt
If 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 Ended
30 seconds
1 pt
If 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 Ended
30 seconds
1 pt
If 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 Ended
30 seconds
1 pt
If 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 Ended
30 seconds
1 pt
The purchase and sale of government bonds by the Fed for the purpose of altering bank reserves is known as
76. Open Ended
30 seconds
1 pt
Open market operations involve the Fed
77. Open Ended
30 seconds
1 pt
If the Fed wants to sell more government bonds than people are willing to buy, then the Fed
78. Open Ended
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1 pt
If market interest rates rise, the selling price of existing bonds in the market will, ceteris paribus,
79. Open Ended
30 seconds
1 pt
If market interest rates fall, the selling price of existing bonds in the market will, ceteris
80. Open Ended
30 seconds
1 pt
The Fed can decrease the federal funds rate by
81. Open Ended
30 seconds
1 pt
The Fed can increase the federal funds rate by
82. Open Ended
30 seconds
1 pt
If the Federal Reserve buys government bonds from the public
83. Open Ended
30 seconds
1 pt
In order to increase the money supply, the Fed can
84. Open Ended
30 seconds
1 pt
Suppose 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 Ended
30 seconds
1 pt
Suppose 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 Ended
30 seconds
1 pt
If 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 Ended
30 seconds
1 pt
If 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 Ended
30 seconds
1 pt
If 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 Ended
30 seconds
1 pt
A growing economy needs a
90. Open Ended
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1 pt
If the Fed wishes to reduce the money supply, it can do all of the following except
91. Open Ended
30 seconds
1 pt
In order to decrease the money supply, the Fed can
92. Open Ended
30 seconds
1 pt
Suppose 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 Ended
30 seconds
1 pt
Which of the following is not required to satisfy Fed minimum reserve requirements?
94. Open Ended
30 seconds
1 pt
Which of the following does not reduce the Fed's control of the money supply?