Exam 13: The Federal Reserve System

The term auction facility (TAF)program was instituted by the Federal Reserve to deal with the ________________________. This program gave banks ____________ options when it comes to borrowing from the Fed.

Exhibit 13-2 -Refer to Exhibit 13-2. What word (up or down)should go in the place of blank (5)and blank (6),respectively?

The president of the Federal Reserve District Bank of New York holds a permanent seat on the Federal Open Market Committee.

When the Fed purchases securities from a bank,it __________ reserves and ____________ the money supply.

The Federal Reserve System came into existence with the Federal Reserve Act of

The interest rate that a commercial bank pays when it borrows from the Fed is the __________ rate.

The Fed

Suppose the Fed sells a $50,000 U.S.Treasury security to Martha,a member of the public.If Martha writes a check to the Fed in order to buy this security,the money in her checking account will be transferred to

If reserves increase by $5 million,what is the difference in the resulting change in checkable deposits when the required reserve ratio is 12.5 percent compared to when it is 10 percent?

The United States is divided into __________ Federal Reserve districts,each with a district bank.

Under a free banking arrangement,when people increase the demand for money a process would begin which would end with a(n)_________________ in the supply of money,______________ government intervention.

There is an inverse relationship between the required reserve ratio and the money supply.

When the Fed is acting as fiscal agent for the Treasury,it will

The boundaries of the Federal Reserve districts were determined based on trade patterns between cities.

There are __________ Federal Reserve Districts.

If the federal funds rate falls below the discount rate,banks will decrease their borrowings from __________ and __________ their borrowings from __________.It follows that when one bank borrows from __________,reserves in the banking system __________.

The discount rate is sometimes also known as the primary credit rate.

The most important responsibility of the Fed is to

The lower the discount rate relative to the federal funds rate,the more likely a commercial bank will borrow from

Why does the president of the Federal Reserve Bank of New York hold a permanent seat on the FOMC?