Question 1

When the Federal Reserve sells U.S.government securities on the open market,this tends to ____ banks reserves and ______ the money supply.

Accepted Answer

A)  raise;raise
B)  lower;lower
C)  raise;lower
D)  lower;raise

Question 2

All of the following are objectives of the Federal Reserve system,except

Accepted Answer

A)  to provide a constant level of currency,resisting pressure for currency growth.
B)  to supervise and regulate our financial institutions.
C)  to provide banking services for the U.S.government.
D)  to serve as a lender of last resort to commercial banks and thrift institutions.
E)  to conduct monetary policy.

Question 3

The writing of a $1,000 check that is drawn on Bank A and deposited in Bank B

Accepted Answer

A)  increases the money supply initially by $1,000.
B)  reduces total reserves of Bank A by $1,000 and increases the total reserves of Bank B by the same amount.
C)  reduces the required reserves of Bank A by $1,000 and increases the required reserves of Bank B by the same amount.
D)  reduces the excess reserves of Bank A by $1,000 and increases the excess reserves of Bank B by the same amount.

Question 4

A reduction in the required reserve ratio would cause the interest rates to

Accepted Answer

A)  increase only if the level of investment is low relative to historic levels.
B)  decrease.
C)  increase.
D)  increase only if the level of unemployment is high.
E)  remain the samE.

Question 5

Which of the following is NOT a correct statement?

Accepted Answer

A)  The country has 12 Federal Reserve districts.
B)  The Federal Open Market Committee carries out open market operations.
C)  A majority of private banks are not part of the Federal Reserve System.
D)  The Fed chairman is appointed by the president for 14 years.
E)  The Senate ratifies the president's appointment of the chairman of the board of governors of the Fed.

Exam 14: The Federal Reserve and Monetary Policy

When the Federal Reserve sells U.S.government securities on the open market,this tends to banks reserves and __ the money supply.

Correct Answer
verified

A reduction in the required reserve ratio would cause the interest rates to

Correct Answer
verified

Which of the following is NOT a correct statement?

Correct Answer
verified

All of the following are objectives of the Federal Reserve system,except

Correct Answer
verified

The writing of a $1,000 check that is drawn on Bank A and deposited in Bank B

Correct Answer
verified

Exam 14: The Federal Reserve and Monetary Policy

When the Federal Reserve sells U.S.government securities on the open market,this tends to ____ banks reserves and ______ the money supply.

Correct AnswerverifiedShow Answer

A reduction in the required reserve ratio would cause the interest rates to

Correct AnswerverifiedShow Answer

Which of the following is NOT a correct statement?

Correct AnswerverifiedShow Answer

All of the following are objectives of the Federal Reserve system,except

Correct AnswerverifiedShow Answer

The writing of a $1,000 check that is drawn on Bank A and deposited in Bank B

Correct AnswerverifiedShow Answer

When the Federal Reserve sells U.S.government securities on the open market,this tends to banks reserves and __ the money supply.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified