Question 1

Members of Congress are able to influence monetary policy,albeit indirectly,through their ability to

Accepted Answer

A) withhold appropriations from the Board of Governors. 
B) withhold appropriations from the Federal Open Market Committee. 
C) propose legislation that would force the Fed to submit budget requests to Congress,as must other government agencies. 
D) instruct the General Accounting Office to audit the foreign exchange market functions of the Federal Reserve. 
A) withhold appropriations from the Board of Governors. 
B) withhold appropriations from the Federal Open Market Committee. 
C) propose legislation that would force the Fed to submit budget requests to Congress,as must other government agencies. 
D) instruct the General Accounting Office to audit the foreign exchange market functions of the Federal Reserve.

Question 2

Each Federal Reserve bank has nine directors.Of these ________ are appointed by the member banks and ________ are appointed by the Board of Governors.

Accepted Answer

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

Question 3

Goal independence is the ability of ________ to set monetary policy ________.

Accepted Answer

A) the central bank; goals 
B) Congress; goals 
C) Congress; instruments 
D) the central bank; instruments 
A) the central bank; goals 
B) Congress; goals 
C) Congress; instruments 
D) the central bank; instruments

Question 4

Which of the following statements about central bank structure and independence are true?

Accepted Answer

A) In recent years,with the exception of the Bank of England and the Bank of Japan,most countries have reduced the independence of their central banks,subjecting them to greater democratic control. 
B) Before the Bank of England was granted greater independence,the Federal Reserve was the most independent of the world's central banks. 
C) Both theory and experience suggest that more independent central banks produce better monetary policy. 
D) While the European Central Bank is independent,it is not as independent as the Federal Reserve. 
A) In recent years,with the exception of the Bank of England and the Bank of Japan,most countries have reduced the independence of their central banks,subjecting them to greater democratic control. 
B) Before the Bank of England was granted greater independence,the Federal Reserve was the most independent of the world's central banks. 
C) Both theory and experience suggest that more independent central banks produce better monetary policy. 
D) While the European Central Bank is independent,it is not as independent as the Federal Reserve.

Question 5

Who are the voting members of the Federal Open Market Committee and why is this committee important? Where does the power lie within this committee?

Accepted Answer

The FOMC determines the monetary policy

Question 6

Which of the following is an entity of the Federal Reserve System?

Accepted Answer

A) The U.S.Treasury Secretary 
B) The FOMC 
C) The Comptroller of the Currency 
D) The FDIC 
A) The U.S.Treasury Secretary 
B) The FOMC 
C) The Comptroller of the Currency 
D) The FDIC

Question 7

The ability of a central bank to set monetary policy instruments is

Accepted Answer

A) political independence. 
B) goal independence. 
C) policy independence. 
D) instrument independence. 
A) political independence. 
B) goal independence. 
C) policy independence. 
D) instrument independence.

Question 8

The financial panic of 1907 resulted in such widespread bank failures and substantial losses to depositors that the American public finally became convinced that

Accepted Answer

A) the First Bank of the United States had failed to serve as a lender of last resort. 
B) the Second Bank of the United States had failed to serve as a lender of last resort. 
C) the Federal Reserve System had failed to serve as a lender of last resort. 
D) a central bank was needed to prevent future panics. 
A) the First Bank of the United States had failed to serve as a lender of last resort. 
B) the Second Bank of the United States had failed to serve as a lender of last resort. 
C) the Federal Reserve System had failed to serve as a lender of last resort. 
D) a central bank was needed to prevent future panics.

Question 9

On paper,the Bank of Canada has ________ instrument independence and ________ goal independence when compared to the Federal Reserve System.

Accepted Answer

A) less; less 
B) less; more 
C) more; less 
D) more; more 
A) less; less 
B) less; more 
C) more; less 
D) more; more

Question 10

Make the case for and against an independent Federal Reserve.

Accepted Answer

Case for: 1.An independent Federal Reser

Question 11

Banks subject to reserve requirements set by the Federal Reserve System include

Accepted Answer

A) only nationally chartered banks. 
B) only banks with assets less than $100 million. 
C) only banks with assets less than $500 million. 
D) all banks whether or not they are members of the Federal Reserve System. 
A) only nationally chartered banks. 
B) only banks with assets less than $100 million. 
C) only banks with assets less than $500 million. 
D) all banks whether or not they are members of the Federal Reserve System.

Question 12

The Federal Reserve Banks are ________ institutions since they are owned by the ________.

Accepted Answer

A) quasi-public; private commercial banks in the district where the Reserve Bank is located 
B) public; private commercial banks in the district where the Reserve Bank is located 
C) quasi-public; Board of Governors 
D) public; Board of Governors 
A) quasi-public; private commercial banks in the district where the Reserve Bank is located 
B) public; private commercial banks in the district where the Reserve Bank is located 
C) quasi-public; Board of Governors 
D) public; Board of Governors

Question 13

Members of the Executive Board of the European System of Central Banks are appointed to ________ year,nonrenewable terms.

Accepted Answer

A) four 
B) eight 
C) ten 
D) fourteen 
A) four 
B) eight 
C) ten 
D) fourteen

Question 14

The theory of bureaucratic behavior when applied to the Fed helps to explain why the Fed

Accepted Answer

A) was supportive of congressional attempts to limit the central bank's autonomy. 
B) was so secretive about the conduct of future monetary policy. 
C) sought less control over banks in the 1980s. 
D) was willing to take on powerful groups that may threaten its autonomy. 
A) was supportive of congressional attempts to limit the central bank's autonomy. 
B) was so secretive about the conduct of future monetary policy. 
C) sought less control over banks in the 1980s. 
D) was willing to take on powerful groups that may threaten its autonomy.

Question 15

Instrument independence is the ability of ________ to set monetary policy ________.

Accepted Answer

A) the central bank; goals 
B) Congress; goals 
C) Congress; instruments 
D) the central bank; instruments 
A) the central bank; goals 
B) Congress; goals 
C) Congress; instruments 
D) the central bank; instruments

Question 16

What makes the Federal Reserve so unique compared to other central banks around the world is its

Accepted Answer

A) centralized structure. 
B) decentralized structure. 
C) regulatory functions. 
D) monetary policy functions. 
A) centralized structure. 
B) decentralized structure. 
C) regulatory functions. 
D) monetary policy functions.

Question 17

The First Bank of the United States

Accepted Answer

A) was disbanded in 1811 when its charter was not renewed. 
B) had its charter renewal vetoed in 1832. 
C) was fundamental in helping the Federal Government finance the War of 1812. 
D) None of the above. 
A) was disbanded in 1811 when its charter was not renewed. 
B) had its charter renewal vetoed in 1832. 
C) was fundamental in helping the Federal Government finance the War of 1812. 
D) None of the above.

Question 18

The research document given to the Federal Open Market Committee that contains information on the state of the economy in each Federal Reserve district is called the

Accepted Answer

A) beige book. 
B) green book. 
C) blue book. 
D) black book. 
A) beige book. 
B) green book. 
C) blue book. 
D) black book.

Question 19

Why does the Federal Reserve Bank of New York play a special role within the Federal Reserve System?

Accepted Answer

The New York district contains the large

Question 20

The president from which Federal Reserve Bank always has a vote in the Federal Open Market Committee?

Accepted Answer

A) Philadelphia 
B) Boston 
C) San Francisco 
D) New York 
A) Philadelphia 
B) Boston 
C) San Francisco 
D) New York

Exam 13: Central Banks and the Federal Reserve System

Members of Congress are able to influence monetary policy,albeit indirectly,through their ability to

Each Federal Reserve bank has nine directors.Of these ________ are appointed by the member banks and ________ are appointed by the Board of Governors.

Goal independence is the ability of ________ to set monetary policy ________.

Which of the following statements about central bank structure and independence are true?

Who are the voting members of the Federal Open Market Committee and why is this committee important? Where does the power lie within this committee?

Which of the following is an entity of the Federal Reserve System?

The ability of a central bank to set monetary policy instruments is

The financial panic of 1907 resulted in such widespread bank failures and substantial losses to depositors that the American public finally became convinced that

On paper,the Bank of Canada has ________ instrument independence and ________ goal independence when compared to the Federal Reserve System.

Make the case for and against an independent Federal Reserve.

Banks subject to reserve requirements set by the Federal Reserve System include

The Federal Reserve Banks are ________ institutions since they are owned by the ________.

Members of the Executive Board of the European System of Central Banks are appointed to ________ year,nonrenewable terms.

The theory of bureaucratic behavior when applied to the Fed helps to explain why the Fed

Instrument independence is the ability of ________ to set monetary policy ________.

What makes the Federal Reserve so unique compared to other central banks around the world is its

The First Bank of the United States

The research document given to the Federal Open Market Committee that contains information on the state of the economy in each Federal Reserve district is called the

Why does the Federal Reserve Bank of New York play a special role within the Federal Reserve System?

The president from which Federal Reserve Bank always has a vote in the Federal Open Market Committee?

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

Understanding Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory,inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

The ISLM Model

Filters

Each Federal Reserve bank has nine directors.Of these are appointed by the member banks and are appointed by the Board of Governors.

Goal independence is the ability of to set monetary policy .

On paper,the Bank of Canada has instrument independence and goal independence when compared to the Federal Reserve System.

The Federal Reserve Banks are institutions since they are owned by the .

Instrument independence is the ability of to set monetary policy .