Exam 13: The Federal Reserve System

When a check is written on an account at Bank A and deposited in Bank B, the reserve account of __________ will rise and reserves of the entire banking system will __________.

The president of the Federal Reserve Bank of ________________ holds a permanent seat on the _________________________.

Use the simple deposit multiplier to help show why the money supply increases when the Fed lowers the required reserve ratio (r).

A bank is reserve deficient when

A required reserve ratio of 7 percent gives rise to a simple deposit multiplier of

Members of the Board of Governors of the Federal Reserve are appointed by the President and approved by the Senate to serve a 14-year term.

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

Which of the following Fed actions will decrease the money supply?

Suppose that the Fed undertakes an open market sale, selling $3 million worth of securities to a bank. If the required reserve ratio is 11%, checkable deposits (or the money supply), would _______________ by ________________ million, assuming that there are no cash leakages and that banks hold zero excess reserves.

Which of the following will decrease the money supply?

The Federal Reserve System

To limit political influence on Fed policy, the terms of the Fed Board of Governors are staggered so that one new appointment is made every four years to coincide with the presidential elections.

The three members of the commission that originally drew up the boundaries of the Federal Reserve Districts and the locations of the district banks were the

The Fed can change the money supply by changing

In the United States, paper currency is printed at the

The sale of government securities by the Fed

Which of the following is not a major responsibility of the Fed?

The required reserve ratio is set by the

The word that best describes the relationship between the required reserve ratio and the money supply is

When the Fed increases the required reserve ratio, a bank's