Question 1

Which of the following is an accurate statement regarding the evolution of the Federal Reserve System?

Accepted Answer

A)  The independence of the Federal Reserve has been systematically eroded by legislation. 
B)  The Federal Reserve has shifted from an agency controlled by the states to a federally controlled agency. 
C)  The Federal Reserve has shifted from a fiscal policy agency to a monetary policy agency. 
D)  The Federal Reserve has shifted from a regional service agency to a national policy-making institution. 
A)  The independence of the Federal Reserve has been systematically eroded by legislation. 
B)  The Federal Reserve has shifted from an agency controlled by the states to a federally controlled agency. 
C)  The Federal Reserve has shifted from a fiscal policy agency to a monetary policy agency. 
D)  The Federal Reserve has shifted from a regional service agency to a national policy-making institution.

Question 2

Reserve requirements on bank deposits are set by

Accepted Answer

A)  the SEC. 
B)  the Federal Reserve board of governors. 
C)  the Federal Reserve district banks. 
D)  Congress. 
A)  the SEC. 
B)  the Federal Reserve board of governors. 
C)  the Federal Reserve district banks. 
D)  Congress.

Question 3

The Comptroller of the Currency

Accepted Answer

A)  serves as Chairman of the Board of Governors. 
B)  serves as a member of the Board of Governors. 
C)  serves as an alternate member of the Board of Governors. 
D)  does not serve on the Board of Governors. 
A)  serves as Chairman of the Board of Governors. 
B)  serves as a member of the Board of Governors. 
C)  serves as an alternate member of the Board of Governors. 
D)  does not serve on the Board of Governors.

Question 4

All twelve Federal Reserve Bank presidents

Accepted Answer

A)  attend Federal Open Market Committee Meetings. 
B)  vote on decisions regarding the discount rate. 
C)  vote on decisions regarding the prime rate. 
D)  vote on decisions regarding bank reserve requirements. 
A)  attend Federal Open Market Committee Meetings. 
B)  vote on decisions regarding the discount rate. 
C)  vote on decisions regarding the prime rate. 
D)  vote on decisions regarding bank reserve requirements.

Question 5

The Board of Governors appoint __________ directors for each Federal Reserve Bank and the member banks elect __________ for the Federal Reserve Bank in their district.

Accepted Answer

A)  three; three 
B)  three; six 
C)  six; three 
D)  six; six 
A)  three; three 
B)  three; six 
C)  six; three 
D)  six; six

Question 6

Which of the following arguments is often used by opponents of Federal Reserve independence?

Accepted Answer

A)  Independence slows the policy decision process. 
B)  Independence causes inflationary pressures to build because of excessive monetary growth. 
C)  Independence leads to conflicts between monetary and fiscal policy. 
D)  Independence causes a concentration of financial power. 
A)  Independence slows the policy decision process. 
B)  Independence causes inflationary pressures to build because of excessive monetary growth. 
C)  Independence leads to conflicts between monetary and fiscal policy. 
D)  Independence causes a concentration of financial power.

Question 7

Over the past seventy-five years, power within the Federal Reserve has shifted from

Accepted Answer

A)  the Federal Reserve Banks to the Board of Governors in Washington. 
B)  the Board of Governors to the Federal Reserve Bank of New York. 
C)  domestic Federal Reserve banks to foreign Federal Reserve banks. 
D)  the Federal Reserve Bank of New York to the Federal Reserve Bank of Dallas. 
A)  the Federal Reserve Banks to the Board of Governors in Washington. 
B)  the Board of Governors to the Federal Reserve Bank of New York. 
C)  domestic Federal Reserve banks to foreign Federal Reserve banks. 
D)  the Federal Reserve Bank of New York to the Federal Reserve Bank of Dallas.

Question 8

Funding for the operations of the Board of Governors of the Federal Reserve is derived from

Accepted Answer

A)  taxes collected from commercial banks. 
B)  the governments of the states in which the district banks operate. 
C)  appropriations from the United States Congress. 
D)  earnings of the Federal Reserve district banks. 
A)  taxes collected from commercial banks. 
B)  the governments of the states in which the district banks operate. 
C)  appropriations from the United States Congress. 
D)  earnings of the Federal Reserve district banks.

Question 9

Congress created the Federal Reserve System in 1913 as the institution delegated to administer

Accepted Answer

A)  monetary policy to stabilize the economy. 
B)  the constitutional power of Congress to "coin money and regulate the value thereof." 
C)  collect taxes for the federal government. 
D)  the minting of coins. 
A)  monetary policy to stabilize the economy. 
B)  the constitutional power of Congress to "coin money and regulate the value thereof." 
C)  collect taxes for the federal government. 
D)  the minting of coins.

Question 10

Which of the following groups within the Federal Reserve System is primarily concerned with open market operations?

Accepted Answer

A)  The Federal Open Market Committee 
B)  The Federal Advisory Council 
C)  The Federal Reserve Bank presidents 
D)  The Board of Governors 
A)  The Federal Open Market Committee 
B)  The Federal Advisory Council 
C)  The Federal Reserve Bank presidents 
D)  The Board of Governors

Question 11

Over time, overall responsibility for formulating monetary policy has become increasingly concentrated in the

Accepted Answer

A)  Federal Reserve Bank of New York. 
B)  Council of Economic Advisors. 
C)  Federal Deposit Insurance Corporation. 
D)  Federal Reserve Board of Governors. 
A)  Federal Reserve Bank of New York. 
B)  Council of Economic Advisors. 
C)  Federal Deposit Insurance Corporation. 
D)  Federal Reserve Board of Governors.

Question 12

Which of the following was an objective of the framers of the Federal Reserve System?

Accepted Answer

A)  Decentralized power 
B)  Executive branch power 
C)  Elimination of private-sector influence 
D)  Consolidation of the banking industry 
A)  Decentralized power 
B)  Executive branch power 
C)  Elimination of private-sector influence 
D)  Consolidation of the banking industry

Question 13

Federal law required that no two Federal Reserve Board Governors come from the same

Accepted Answer

A)  state. 
B)  political party. 
C)  industry. 
D)  Federal Reserve district. 
A)  state. 
B)  political party. 
C)  industry. 
D)  Federal Reserve district.

Question 14

Supporters of Federal Reserve independence contend that independence from the rest of the federal government leads to lower

Accepted Answer

A)  inflation rates. 
B)  interest rates. 
C)  reserve requirements. 
D)  rates of unemployment. 
A)  inflation rates. 
B)  interest rates. 
C)  reserve requirements. 
D)  rates of unemployment.

Question 15

With respect to reserve requirements on bank deposits, the Board of Governors can set them

Accepted Answer

A)  at any level the Board desires. 
B)  at any level approved by the Federal Open Market Committee. 
C)  within the bounds of the specific limits imposed by Congress. 
D)  within the bounds of the specific limits set by the Secretary of the Treasury. 
A)  at any level the Board desires. 
B)  at any level approved by the Federal Open Market Committee. 
C)  within the bounds of the specific limits imposed by Congress. 
D)  within the bounds of the specific limits set by the Secretary of the Treasury.

Question 16

Which of the following groups within the Federal Reserve System is primarily concerned with public relations?

Accepted Answer

A)  The Federal Open Market Committee 
B)  The Federal Advisory Council 
C)  The Federal Reserve Bank presidents 
D)  The Board of Governors 
A)  The Federal Open Market Committee 
B)  The Federal Advisory Council 
C)  The Federal Reserve Bank presidents 
D)  The Board of Governors

Question 17

In which country is the central bank more independent than the Federal Reserve?

Accepted Answer

A)  Germany 
B)  Japan 
C)  Great Britain 
D)  All of the above. 
A)  Germany 
B)  Japan 
C)  Great Britain 
D)  All of the above.

Question 18

The principal policy-maker of the Federal Reserve is the

Accepted Answer

A)  Chairman of the Federal Reserve Board of Governors. 
B)  president of the New York Federal Reserve bank. 
C)  president of the Washington, D.C. Federal Reserve bank. 
D)  Comptroller of the Currency. 
A)  Chairman of the Federal Reserve Board of Governors. 
B)  president of the New York Federal Reserve bank. 
C)  president of the Washington, D.C. Federal Reserve bank. 
D)  Comptroller of the Currency.

Question 19

Which of the following is not a member of the Federal Open Market Committee (FOMC)?

Accepted Answer

A)  The entire board of governors 
B)  Five reserve bank presidents 
C)  The chairman of the SEC 
D)  All of the above are members of the FOMC 
A)  The entire board of governors 
B)  Five reserve bank presidents 
C)  The chairman of the SEC 
D)  All of the above are members of the FOMC

Question 20

Voting members of the Federal Open Market Committee are

Accepted Answer

A)  the Board of Governors, the presidents of five Federal Reserve Banks, and the Comptroller of the Currency. 
B)  the Board of Governors and presidents of five Federal Reserve Banks. 
C)  the Board of Governors and all twelve Federal Reserve Bank presidents. 
D)  the Board of Governors, all twelve Federal Reserve Bank presidents, and the Secretary of the Treasury. 
A)  the Board of Governors, the presidents of five Federal Reserve Banks, and the Comptroller of the Currency. 
B)  the Board of Governors and presidents of five Federal Reserve Banks. 
C)  the Board of Governors and all twelve Federal Reserve Bank presidents. 
D)  the Board of Governors, all twelve Federal Reserve Bank presidents, and the Secretary of the Treasury.

Exam 17: Who's in Charge Here?

Which of the following is an accurate statement regarding the evolution of the Federal Reserve System?

Reserve requirements on bank deposits are set by

The Comptroller of the Currency

All twelve Federal Reserve Bank presidents

The Board of Governors appoint __________ directors for each Federal Reserve Bank and the member banks elect __________ for the Federal Reserve Bank in their district.

Which of the following arguments is often used by opponents of Federal Reserve independence?

Over the past seventy-five years, power within the Federal Reserve has shifted from

Funding for the operations of the Board of Governors of the Federal Reserve is derived from

Congress created the Federal Reserve System in 1913 as the institution delegated to administer

Which of the following groups within the Federal Reserve System is primarily concerned with open market operations?

Over time, overall responsibility for formulating monetary policy has become increasingly concentrated in the

Which of the following was an objective of the framers of the Federal Reserve System?

Federal law required that no two Federal Reserve Board Governors come from the same

Supporters of Federal Reserve independence contend that independence from the rest of the federal government leads to lower

With respect to reserve requirements on bank deposits, the Board of Governors can set them

Which of the following groups within the Federal Reserve System is primarily concerned with public relations?

In which country is the central bank more independent than the Federal Reserve?

The principal policy-maker of the Federal Reserve is the

Which of the following is not a member of the Federal Open Market Committee (FOMC)?

Voting members of the Federal Open Market Committee are

Introducing Money, Banking, and Financial Markets

The Role of Money in the Macroeconomy

Financial Instruments, Markets, and Institutions

Interest Rate Measurement and Behavior

The Term and Risk Structure of Interest Rates

The Structure and Performance of Securities Markets

The Pricing of Risky Financial Assets

Money and Capital Markets

Demystifying Derivatives

Understanding Foreign Exchange

The Nature of Financial Intermediation

Depository Financial Institutions

Nondepository Financial Institutions

Understanding Financial Contracts

The Regulation of Markets and Institutions

Financial System Design

Bank Reserves and the Money Supply

The Instruments of Central Bankin

Understanding Movements in Bank Reserves

Monetary Policy Strategy

The Classical Foundations

The Keynesian Framework

The ISLM World

Money and Economic Stability in the ISLM World

An Aggregate Supply and Demand Perspective on Money and Economic Stability

Rational Expectations: Theory and Policy Implications

Empirical Evidence on the Effectiveness of Monetary Policy

Tying It All Together

Filters

The Board of Governors appoint directors for each Federal Reserve Bank and the member banks elect for the Federal Reserve Bank in their district.