Question 1

The Federal Open Market Committee

Accepted Answer

A)  is comprised of members of the Federal Reserve board and representatives of all Federal Reserve Banks. 
B)  came into being at the time the Federal Reserve System was created. 
C)  is made up of the presidents of the 12 Federal Reserve Banks. 
D)  was created under a provision of the Banking Act of 1935. 
A)  is comprised of members of the Federal Reserve board and representatives of all Federal Reserve Banks. 
B)  came into being at the time the Federal Reserve System was created. 
C)  is made up of the presidents of the 12 Federal Reserve Banks. 
D)  was created under a provision of the Banking Act of 1935.

Question 2

____________________________ authorizes the Federal Reserve Board to identify unfair or deceptive acts or practices on the part of banks and to issue regulations to prohibit them.

Accepted Answer

A)  Truth in Lending Act 
B)  Equal Credit Opportunity Act 
C)  Federal Trade Commission Improvement Act 
D)  Fair Credit Billing Act 
A)  Truth in Lending Act 
B)  Equal Credit Opportunity Act 
C)  Federal Trade Commission Improvement Act 
D)  Fair Credit Billing Act

Question 3

The Fed lending rate to depository institutions was consistently lower than the bank prime lending rate during the 1980-2009 period.

Accepted Answer

A) True 
 B)False

Question 4

The minimum amount of total reserves that depository institutions must hold are called fractional reserves.

Accepted Answer

A) True 
 B)False

Question 5

The dynamic actions of the Federal Reserve System

Accepted Answer

A)  contribute to the smooth everyday functioning of the economy. 
B)  are designed to meet the credit needs of individuals and institutions. 
C)  support depositories and other institutions. 
D)  stimulate or repress the level of prices or economic activity. 
A)  contribute to the smooth everyday functioning of the economy. 
B)  are designed to meet the credit needs of individuals and institutions. 
C)  support depositories and other institutions. 
D)  stimulate or repress the level of prices or economic activity.

Question 6

Due to its easy-of-use, quantitative easing is the primary Fed monetary policy.

Accepted Answer

A) True 
 B)False

Question 7

Members of the Federal Reserve System may include

Accepted Answer

A)  commercial banks with a national charter. 
B)  credit unions. 
C)  savings and loan institutions. 
D)  thrift and loan associations. 
A)  commercial banks with a national charter. 
B)  credit unions. 
C)  savings and loan institutions. 
D)  thrift and loan associations.

Question 8

The Board of Governors of the Federal Reserve System

Accepted Answer

A)  consists of 7 appointed members. 
B)  sets reserve requirements. 
C)  approves discount rates as part of monetary policy. 
D)  all the above. 
A)  consists of 7 appointed members. 
B)  sets reserve requirements. 
C)  approves discount rates as part of monetary policy. 
D)  all the above.

Question 9

Although it enjoys substantial independence in its operations, the appointive power of the president and the ability of Congress to alter its structure make the ______________ a dependent political structure and one of the most powerful monetary organizations in the world.

Accepted Answer

A)  Board of Governors (BOG) 
B)  Board of Directors (BO
D)  
C)  Governing Body (GO
B)  
D)  Financial Governors (FOG) 
A)  Board of Governors (BOG) 
B)  Board of Directors (BO
D)  
C)  Governing Body (GO
B)  
D)  Financial Governors (FOG)

Question 10

The amount by which total reserves are greater than required reserves.

Accepted Answer

A)  Excess reserves 
B)  Required reserves 
C)  Fractional reserve system 
D)  Bank reserves 
A)  Excess reserves 
B)  Required reserves 
C)  Fractional reserve system 
D)  Bank reserves

Question 11

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called defensive activities.

Accepted Answer

A) True 
 B)False

Question 12

The Federal Reserve Act of 1913 provided that all national and state-chartered banks were to become members of the Fed.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a component of the Federal Reserve System?

Accepted Answer

A)  Member banks 
B)  Nonmember banks 
C)  Advisory committees 
D)  Federal Closed Market Committee 
A)  Member banks 
B)  Nonmember banks 
C)  Advisory committees 
D)  Federal Closed Market Committee

Question 14

The Fed is no longer involved in processing checks.

Accepted Answer

A) True 
 B)False

Question 15

The closer to the required minimum the banking system maintains its reserves, the tighter the control the Fed has over the money creation process through its other instruments.

Accepted Answer

A) True 
 B)False

Question 16

One significant feature of DIDMCA was that it

Accepted Answer

A)  expanded the ability of the Fed to influence unemployment rates. 
B)  expanded Fed control over the reserve requirements of non-member banks. 
C)  created the FDIC. 
D)  eliminated regulation Z. 
A)  expanded the ability of the Fed to influence unemployment rates. 
B)  expanded Fed control over the reserve requirements of non-member banks. 
C)  created the FDIC. 
D)  eliminated regulation Z.

Question 17

The Advisory Committee to the Board of Governors is made up of three councils. Which of the following is not one of those?

Accepted Answer

A)  Consumer Advisory Council 
B)  Federal Advisory Council 
C)  Thrift Institutions Advisory Council 
D)  Business Advisory Council 
A)  Consumer Advisory Council 
B)  Federal Advisory Council 
C)  Thrift Institutions Advisory Council 
D)  Business Advisory Council

Question 18

This act provides a basic framework regarding the rights, liabilities, and responsibilities of consumers who use electronic transfer services and of the financial institutions that offer them.

Accepted Answer

A)  The Safe Checks Act 
B)  The Electronic Funds Transfer Act 
C)  The Real Estate Settlement Procedures Act 
D)  The Consumer Leasing Act 
A)  The Safe Checks Act 
B)  The Electronic Funds Transfer Act 
C)  The Real Estate Settlement Procedures Act 
D)  The Consumer Leasing Act

Question 19

A large portion of Fed employees hold jobs directly related to the Fed's role as fiscal agent for the U.S. government.

Accepted Answer

A) True 
 B)False

Question 20

The Federal Open Market Committee

Accepted Answer

A)  typically buys and sells long-term corporate bonds 
B)  implements the most powerful and flexible monetary policy tool of the Fed 
C)  works out of Washington D.C. 
D)  deals with most of the commercial banks of the nation 
A)  typically buys and sells long-term corporate bonds 
B)  implements the most powerful and flexible monetary policy tool of the Fed 
C)  works out of Washington D.C. 
D)  deals with most of the commercial banks of the nation

The Federal Open Market Committee

____________________________ authorizes the Federal Reserve Board to identify unfair or deceptive acts or practices on the part of banks and to issue regulations to prohibit them.

The Fed lending rate to depository institutions was consistently lower than the bank prime lending rate during the 1980-2009 period.

The minimum amount of total reserves that depository institutions must hold are called fractional reserves.

The dynamic actions of the Federal Reserve System

Due to its easy-of-use, quantitative easing is the primary Fed monetary policy.

Members of the Federal Reserve System may include

The Board of Governors of the Federal Reserve System

Although it enjoys substantial independence in its operations, the appointive power of the president and the ability of Congress to alter its structure make the ______________ a dependent political structure and one of the most powerful monetary organizations in the world.

The amount by which total reserves are greater than required reserves.

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called defensive activities.

The Federal Reserve Act of 1913 provided that all national and state-chartered banks were to become members of the Fed.

Which of the following is a component of the Federal Reserve System?

The Fed is no longer involved in processing checks.

The closer to the required minimum the banking system maintains its reserves, the tighter the control the Fed has over the money creation process through its other instruments.

One significant feature of DIDMCA was that it

The Advisory Committee to the Board of Governors is made up of three councils. Which of the following is not one of those?

This act provides a basic framework regarding the rights, liabilities, and responsibilities of consumers who use electronic transfer services and of the financial institutions that offer them.

A large portion of Fed employees hold jobs directly related to the Fed's role as fiscal agent for the U.S. government.

The Federal Open Market Committee

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 4: Federal Reserve System

The Federal Open Market Committee

____________________________ authorizes the Federal Reserve Board to identify unfair or deceptive acts or practices on the part of banks and to issue regulations to prohibit them.

The Fed lending rate to depository institutions was consistently lower than the bank prime lending rate during the 1980-2009 period.

The minimum amount of total reserves that depository institutions must hold are called fractional reserves.

The dynamic actions of the Federal Reserve System

Due to its easy-of-use, quantitative easing is the primary Fed monetary policy.

Members of the Federal Reserve System may include

The Board of Governors of the Federal Reserve System

Although it enjoys substantial independence in its operations, the appointive power of the president and the ability of Congress to alter its structure make the ______________ a dependent political structure and one of the most powerful monetary organizations in the world.

The amount by which total reserves are greater than required reserves.

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called defensive activities.

The Federal Reserve Act of 1913 provided that all national and state-chartered banks were to become members of the Fed.

Which of the following is a component of the Federal Reserve System?

The Fed is no longer involved in processing checks.

The closer to the required minimum the banking system maintains its reserves, the tighter the control the Fed has over the money creation process through its other instruments.

One significant feature of DIDMCA was that it

The Advisory Committee to the Board of Governors is made up of three councils. Which of the following is not one of those?

This act provides a basic framework regarding the rights, liabilities, and responsibilities of consumers who use electronic transfer services and of the financial institutions that offer them.

A large portion of Fed employees hold jobs directly related to the Fed's role as fiscal agent for the U.S. government.

The Federal Open Market Committee

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters