Question 1

This act sets up a procedure for correcting mistakes on credit records and requires that records be used only for legitimate business purposes.

Accepted Answer

A)  The Fair Credit Reporting Act 
B)  The Electronic Funds Transfer Act 
C)  The Real Estate Settlement Procedures Act 
D)  The Consumer Leasing Act 
A)  The Fair Credit Reporting Act 
B)  The Electronic Funds Transfer Act 
C)  The Real Estate Settlement Procedures Act 
D)  The Consumer Leasing Act

Question 2

A basic policy instrument that the Fed uses to execute monetary policy is which of the following?

Accepted Answer

A)  changing bank interest rates. 
B)  changing the lending/discount rate. 
C)  issuing securities. 
D)  buying loans from mortgage banks. 
A)  changing bank interest rates. 
B)  changing the lending/discount rate. 
C)  issuing securities. 
D)  buying loans from mortgage banks.

Question 3

As of 2019, the Chairman of the Federal Reserve is ________________________.

Accepted Answer

A)  Jerome Powell 
B)  Alan Greenspan 
C)  Ben Bernanke 
D)  Janet Yellen 
A)  Jerome Powell 
B)  Alan Greenspan 
C)  Ben Bernanke 
D)  Janet Yellen

Question 4

The two routes of check clearance include the _____________ settlement, in which the transaction takes place entirely within a single Federal Reserve district, and the _____________ settlement, in which there are relationships between banks of two Federal Reserve districts.

Accepted Answer

A)  interdistrict, intradistrict 
B)  intradistrict, interdistrict 
C)  Fed wire, District wire 
D)  District wire, Fed wire 
A)  interdistrict, intradistrict 
B)  intradistrict, interdistrict 
C)  Fed wire, District wire 
D)  District wire, Fed wire

Question 5

Which monetary policy tool does the Fed use most infrequently?

Accepted Answer

A)  changing reserve requirements 
B)  changing the discount rate 
C)  open market operations 
D)  changing the Fed Funds rate 
A)  changing reserve requirements 
B)  changing the discount rate 
C)  open market operations 
D)  changing the Fed Funds rate

Question 6

The Federal Open Market Committee directs open market operations by buying and selling government securities which are the primary instruments of exercising monetary policy.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is most correct?

Accepted Answer

A)  Open-market operations always lead to an immediate increase in the volume of lending; this is especially true when bonds are sold to restrict deposit growth. 
B)  Open-market operations don't always lead to an immediate change in the volume of deposits; this is especially true when bonds are purchased to expand deposit growth. 
C)  Open-market operations always lead to an immediate change in the volume of deposits; this is especially true when bonds are sold to restrict deposit growth. 
D)  Open-market operations don't always lead to an immediate change in the volume of deposits; this is especially true when bonds are sold to restrict deposit growth. 
A)  Open-market operations always lead to an immediate increase in the volume of lending; this is especially true when bonds are sold to restrict deposit growth. 
B)  Open-market operations don't always lead to an immediate change in the volume of deposits; this is especially true when bonds are purchased to expand deposit growth. 
C)  Open-market operations always lead to an immediate change in the volume of deposits; this is especially true when bonds are sold to restrict deposit growth. 
D)  Open-market operations don't always lead to an immediate change in the volume of deposits; this is especially true when bonds are sold to restrict deposit growth.

Question 8

The Fed prefers to change reserve requirements rather than to use open market operations.

Accepted Answer

A) True 
 B)False

Question 9

Also known as Fannie Mae.

Accepted Answer

A)  Government National Mortgage Association 
B)  Federal National Mortgage Association 
C)  Federal Home Loan Mortgage Corporation 
D)  Federal Reserve System 
A)  Government National Mortgage Association 
B)  Federal National Mortgage Association 
C)  Federal Home Loan Mortgage Corporation 
D)  Federal Reserve System

Question 10

The Government National Mortgage Association (Ginnie Mae) was created in 1968 as a public-private corporation.

Accepted Answer

A) True 
 B)False

Question 11

The United States was one of the earliest major-industrial nations to adopt a permanent system of central banking.

Accepted Answer

A) True 
 B)False

Question 12

All Federal Reserve Banks have

Accepted Answer

A)  check clearance facilities. 
B)  branch banks. 
C)  directors who are elected for 14-year terms. 
D)  directors who are appointed by the President of the United States. 
A)  check clearance facilities. 
B)  branch banks. 
C)  directors who are elected for 14-year terms. 
D)  directors who are appointed by the President of the United States.

Question 13

For which of the following are member banks allowed borrowing at the Fed's discount window?

Accepted Answer

A)  funds to purchase securities 
B)  funds to meet depositor withdrawal demands 
C)  to invest in subsidiaries 
D)  to loan to other banks 
A)  funds to purchase securities 
B)  funds to meet depositor withdrawal demands 
C)  to invest in subsidiaries 
D)  to loan to other banks

Question 14

The Federal Open Market Committee

Accepted Answer

A)  is made up of the presidents of the 12 Federal Reserve Banks. 
B)  consists of the seven members of the Board of Governors of the Fed, plus five presidents of Reserve Banks. 
C)  is appointed by the Chairman of the Federal Reserve System. 
D)  is elected by Fed member banks. 
A)  is made up of the presidents of the 12 Federal Reserve Banks. 
B)  consists of the seven members of the Board of Governors of the Fed, plus five presidents of Reserve Banks. 
C)  is appointed by the Chairman of the Federal Reserve System. 
D)  is elected by Fed member banks.

Question 15

In addition to the clearing of checks through Federal Reserve Banks, the Fed accommodates check clearing through

Accepted Answer

A)  check clearinghouses it sponsors in major cities. 
B)  its branches and a group of regional check-processing centers. 
C)  electronic transfers of funds. 
D)  the United Postal Service. 
A)  check clearinghouses it sponsors in major cities. 
B)  its branches and a group of regional check-processing centers. 
C)  electronic transfers of funds. 
D)  the United Postal Service.

Question 16

The central bank of Japan is called the First Bank of Japan.

Accepted Answer

A) True 
 B)False

Question 17

Under the authority of the Federal Reserve Act of 1913

Accepted Answer

A)  member banks were required to purchase capital stock in the Federal Reserve Banks of their district. 
B)  member banks may not borrow from the Fed. 
C)  a formal open-market committee arrangement was established. 
D)  national banks were permitted to become members of the Fed if they could show evidence of satisfactory financial condition. 
A)  member banks were required to purchase capital stock in the Federal Reserve Banks of their district. 
B)  member banks may not borrow from the Fed. 
C)  a formal open-market committee arrangement was established. 
D)  national banks were permitted to become members of the Fed if they could show evidence of satisfactory financial condition.

Question 18

Which of the following is not a responsibility of the Federal Reserve Banks?

Accepted Answer

A)  Sets reserve requirements 
B)  Proposes discount rates 
C)  Furnishes currency 
D)  Handles U.S. government debt and cash balances 
A)  Sets reserve requirements 
B)  Proposes discount rates 
C)  Furnishes currency 
D)  Handles U.S. government debt and cash balances

Question 19

Bank holding companies are supervised and examined by

Accepted Answer

A)  the Comptroller of the Currency. 
B)  the FDIC. 
C)  the Federal Reserve. 
D)  internal auditors only. 
A)  the Comptroller of the Currency. 
B)  the FDIC. 
C)  the Federal Reserve. 
D)  internal auditors only.

Question 20

The essential requirements of a well-functioning financial system include an efficient national payments system, a flexible money supply, and a lending/borrowing mechanism to help alleviate liquidity problems when they arise.

Accepted Answer

A) True 
 B)False

This act sets up a procedure for correcting mistakes on credit records and requires that records be used only for legitimate business purposes.

A basic policy instrument that the Fed uses to execute monetary policy is which of the following?

As of 2019, the Chairman of the Federal Reserve is ________________________.

The two routes of check clearance include the _ settlement, in which the transaction takes place entirely within a single Federal Reserve district, and the _ settlement, in which there are relationships between banks of two Federal Reserve districts.

Which monetary policy tool does the Fed use most infrequently?

The Federal Open Market Committee directs open market operations by buying and selling government securities which are the primary instruments of exercising monetary policy.

Which of the following statements is most correct?

The Fed prefers to change reserve requirements rather than to use open market operations.

Also known as Fannie Mae.

The Government National Mortgage Association (Ginnie Mae) was created in 1968 as a public-private corporation.

The United States was one of the earliest major-industrial nations to adopt a permanent system of central banking.

All Federal Reserve Banks have

For which of the following are member banks allowed borrowing at the Fed's discount window?

The Federal Open Market Committee

In addition to the clearing of checks through Federal Reserve Banks, the Fed accommodates check clearing through

The central bank of Japan is called the First Bank of Japan.

Under the authority of the Federal Reserve Act of 1913

Which of the following is not a responsibility of the Federal Reserve Banks?

Bank holding companies are supervised and examined by

The essential requirements of a well-functioning financial system include an efficient national payments system, a flexible money supply, and a lending/borrowing mechanism to help alleviate liquidity problems when they arise.

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

This act sets up a procedure for correcting mistakes on credit records and requires that records be used only for legitimate business purposes.

A basic policy instrument that the Fed uses to execute monetary policy is which of the following?

As of 2019, the Chairman of the Federal Reserve is ________________________.

The two routes of check clearance include the _____________ settlement, in which the transaction takes place entirely within a single Federal Reserve district, and the _____________ settlement, in which there are relationships between banks of two Federal Reserve districts.

Which monetary policy tool does the Fed use most infrequently?

The Federal Open Market Committee directs open market operations by buying and selling government securities which are the primary instruments of exercising monetary policy.

Which of the following statements is most correct?

The Fed prefers to change reserve requirements rather than to use open market operations.

Also known as Fannie Mae.

The Government National Mortgage Association (Ginnie Mae) was created in 1968 as a public-private corporation.

The United States was one of the earliest major-industrial nations to adopt a permanent system of central banking.

All Federal Reserve Banks have

For which of the following are member banks allowed borrowing at the Fed's discount window?

The Federal Open Market Committee

In addition to the clearing of checks through Federal Reserve Banks, the Fed accommodates check clearing through

The central bank of Japan is called the First Bank of Japan.

Under the authority of the Federal Reserve Act of 1913

Which of the following is not a responsibility of the Federal Reserve Banks?

Bank holding companies are supervised and examined by

The essential requirements of a well-functioning financial system include an efficient national payments system, a flexible money supply, and a lending/borrowing mechanism to help alleviate liquidity problems when they arise.

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

The two routes of check clearance include the _ settlement, in which the transaction takes place entirely within a single Federal Reserve district, and the _ settlement, in which there are relationships between banks of two Federal Reserve districts.