Exam 13: The Federal Reserve System

In its current execution of monetary policy, the Fed does not usually have a specific _____________ target, but rather it tries to target a specific ________________.

The corridor is the ________________ section of the ______________________ curve of reserves in the federal funds market.

Every time the Fed buys or sells on the open market, the __________ changes.

When commercial banks borrow from other commercial banks, the immediate impact is that reserves in the banking system

When the Federal Reserve system was being created, some people thought that there should be as few district banks as possible to enhance efficiency and for ease of operation.

When Bank A obtains a loan from the Fed, the

The Federal Reserve Bank of Minneapolis once chartered a small airplane to deliver money to a commercial bank that was experiencing a "mad run" on the bank.

Explain the difference between the discount rate and the federal funds rate. If the Fed wants to lower one of these rates, which one can the Fed change by issuing an order? Describe in detail how the Fed helps to lower the other rate.

A Federal Reserve Bank is located in which of the following cities?

If the Fed lowers the discount rate (relative to the federal funds rate), banks will (likely) borrow __________ from the Fed, which will __________ reserves in the banking system, and eventually __________ the money supply.

Federal Reserve Notes held by the Fed are considered part of the

The interest rate that the Fed pays on reserves acts as a ceiling on the federal funds rate.

The original boundaries for the Federal Reserve districts were determined based on

Exhibit 13-1 ​ Assume that the required reserve ratio is 10%, that there are no cash leakages, and that banks hold zero excess reserves. -Refer to Exhibit 13-1. Suppose that the Federal Reserve conducts open market operations by purchasing $1,000 worth of government securities from Bank A. As a result, Bank A finds itself with $1,000 in excess reserves that it lends out and those funds end up in Bank B. The loan made by Bank B ends up in Bank C, and the loan made by bank C ends up in Bank D. What dollar value goes in blanks (E) and (F), respectively?.

The Federal Reserve System began operations in

Which of the following will cause the money supply to decline?

Exhibit 13-1 ​ Assume that the required reserve ratio is 10%, that there are no cash leakages, and that banks hold zero excess reserves. -Refer to Exhibit 13-1. Suppose that the Federal Reserve conducts open market operations by purchasing $1,000 worth of government securities from Bank A. At the end of this process of money creation, what equation would be used to determine the total amount of new checkable deposits?

The members of the Board of Governors of the Federal Reserve are

Which of the following is not a function of the Fed?

The president of the ________________________ holds a permanent seat on the FOMC.