Question 1

Member banks of the Federal Reserve System

Accepted Answer

A)  must maintain all reserves with their Federal Reserve Bank. 
B)  may include deposits held at large city banks as legal reserves. 
C)  maintain levels of reserves based on the size of the city in which they are located. 
D)  are permitted to count vault cash as part of their reserves. 
A)  must maintain all reserves with their Federal Reserve Bank. 
B)  may include deposits held at large city banks as legal reserves. 
C)  maintain levels of reserves based on the size of the city in which they are located. 
D)  are permitted to count vault cash as part of their reserves.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

As of 2019, there have been how many Chairmen of the Federal Reserve?

Accepted Answer

A)  14 
B)  15 
C)  16 
D)  17 
A)  14 
B)  15 
C)  16 
D)  17

Question 4

Quantitative easing is when the Fed engages in purchasing financial assets from banks and other financial institutions with newly created money, resulting in larger bank excess reserves and increased money supply and liquidity.

Accepted Answer

A) True 
 B)False

Question 5

Federal Reserve actions that offset unexpected monetary developments and contribute to the smooth everyday functioning of the economy are called

Accepted Answer

A)  defensive actions. 
B)  dynamic actions. 
C)  accommodative actions. 
D)  automatic actions. 
A)  defensive actions. 
B)  dynamic actions. 
C)  accommodative actions. 
D)  automatic actions.

Question 6

The Federal Reserve act required that all national banks were to become members of the Fed.

Accepted Answer

A) True 
 B)False

Question 7

Because of the National Banking Act, the volume of national bank notes depends on the government bond market rather than the seasonal or cyclical needs of the nation for currency.

Accepted Answer

A) True 
 B)False

Question 8

The least used monetary policy instrument used by the Fed is

Accepted Answer

A)  open market operations 
B)  changing the discount rate 
C)  changing the reserve requirement 
D)  issuing treasury bills 
A)  open market operations 
B)  changing the discount rate 
C)  changing the reserve requirement 
D)  issuing treasury bills

Question 9

The principle examining activity of the Federal Reserve System is directed to

Accepted Answer

A)  all state-chartered banks 
B)  state-chartered member banks 
C)  all national banks 
D)  all state-chartered and national banks 
A)  all state-chartered banks 
B)  state-chartered member banks 
C)  all national banks 
D)  all state-chartered and national banks

Question 10

The five components of the Federal Reserve System include:

Accepted Answer

A)  Member banks, Federal Reserve District Banks, Board of Governors, Federal Open Market Committee, Monetary Committees. 
B)  Nonmember banks, Federal Reserve District Banks, Board of Governors, Federal Open Market Committee, Advisory committees. 
C)  Member banks, Federal Reserve District Banks, Board of Governors, Federal Open Market Committee, Advisory committees. 
D)  Member banks, Federal Reserve District Banks, Board of Governors, Federal Closed Market Committee, Advisory committees. 
A)  Member banks, Federal Reserve District Banks, Board of Governors, Federal Open Market Committee, Monetary Committees. 
B)  Nonmember banks, Federal Reserve District Banks, Board of Governors, Federal Open Market Committee, Advisory committees. 
C)  Member banks, Federal Reserve District Banks, Board of Governors, Federal Open Market Committee, Advisory committees. 
D)  Member banks, Federal Reserve District Banks, Board of Governors, Federal Closed Market Committee, Advisory committees.

Question 11

____________________________ requires disclosure of the finance charge and the annual percentage rate of credit along with certain other costs and terms to permit consumers to compare the prices of credit from differing sources.

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 12

The Consumer Credit Protection Act requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

Accepted Answer

A) True 
 B)False

Question 13

Before the Federal Reserve System was created, a large part of the reserves of commercial banks was

Accepted Answer

A)  in the form of state and federal government bonds. 
B)  deposited with the United States Treasury. 
C)  held as deposits with large city banks. 
D)  held as cash in their vaults. 
A)  in the form of state and federal government bonds. 
B)  deposited with the United States Treasury. 
C)  held as deposits with large city banks. 
D)  held as cash in their vaults.

Question 14

The Fed controls the _____ supply.

Accepted Answer

A)  credit 
B)  mortgage 
C)  money 
D)  credit card balances 
A)  credit 
B)  mortgage 
C)  money 
D)  credit card balances

Question 15

As of early 2019, nearly all the checks processed for collection by Federal Reserve Banks are still received as paper checks.

Accepted Answer

A) True 
 B)False

Question 16

Under the authority of the Federal Reserve Act of 1913

Accepted Answer

A)  all national and state-chartered banks must become members of the Fed. 
B)  only national banks were permitted to become members of the Fed. 
C)  state-chartered banks were permitted to withdraw from membership with the Fed. 
D)  a system of deposit insurance was created. 
A)  all national and state-chartered banks must become members of the Fed. 
B)  only national banks were permitted to become members of the Fed. 
C)  state-chartered banks were permitted to withdraw from membership with the Fed. 
D)  a system of deposit insurance was created.

Question 17

The Federal Reserve Banks are owned by

Accepted Answer

A)  commercial banks. 
B)  the U.S. Treasury. 
C)  national member banks of the Federal Reserve System. 
D)  member banks of the Federal Reserve System. 
A)  commercial banks. 
B)  the U.S. Treasury. 
C)  national member banks of the Federal Reserve System. 
D)  member banks of the Federal Reserve System.

Question 18

The accommodative actions of the Fed includes buying treasury securities.

Accepted Answer

A) True 
 B)False

Question 19

The most used monetary policy instrument used by the Fed is

Accepted Answer

A)  open market operations. 
B)  changing the discount rate. 
C)  changing the reserve requirement. 
D)  issuing securities. 
A)  open market operations. 
B)  changing the discount rate. 
C)  changing the reserve requirement. 
D)  issuing securities.

Question 20

One of the major weaknesses of the banking system before the Federal Reserve System was set up was

Accepted Answer

A)  the arrangement for holding reserves. 
B)  the lack of a deposit insurance system. 
C)  a lack of currency and coin. 
D)  an inadequate supply of government bonds. 
A)  the arrangement for holding reserves. 
B)  the lack of a deposit insurance system. 
C)  a lack of currency and coin. 
D)  an inadequate supply of government bonds.

Member banks of the Federal Reserve System

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

As of 2019, there have been how many Chairmen of the Federal Reserve?

Quantitative easing is when the Fed engages in purchasing financial assets from banks and other financial institutions with newly created money, resulting in larger bank excess reserves and increased money supply and liquidity.

Federal Reserve actions that offset unexpected monetary developments and contribute to the smooth everyday functioning of the economy are called

The Federal Reserve act required that all national banks were to become members of the Fed.

Because of the National Banking Act, the volume of national bank notes depends on the government bond market rather than the seasonal or cyclical needs of the nation for currency.

The least used monetary policy instrument used by the Fed is

The principle examining activity of the Federal Reserve System is directed to

The five components of the Federal Reserve System include:

____________________________ requires disclosure of the finance charge and the annual percentage rate of credit along with certain other costs and terms to permit consumers to compare the prices of credit from differing sources.

The Consumer Credit Protection Act requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

Before the Federal Reserve System was created, a large part of the reserves of commercial banks was

The Fed controls the _____ supply.

As of early 2019, nearly all the checks processed for collection by Federal Reserve Banks are still received as paper checks.

Under the authority of the Federal Reserve Act of 1913

The Federal Reserve Banks are owned by

The accommodative actions of the Fed includes buying treasury securities.

The most used monetary policy instrument used by the Fed is

One of the major weaknesses of the banking system before the Federal Reserve System was set up was

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

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Exam 4: Federal Reserve System

Member banks of the Federal Reserve System

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

As of 2019, there have been how many Chairmen of the Federal Reserve?

Quantitative easing is when the Fed engages in purchasing financial assets from banks and other financial institutions with newly created money, resulting in larger bank excess reserves and increased money supply and liquidity.

Federal Reserve actions that offset unexpected monetary developments and contribute to the smooth everyday functioning of the economy are called

The Federal Reserve act required that all national banks were to become members of the Fed.

Because of the National Banking Act, the volume of national bank notes depends on the government bond market rather than the seasonal or cyclical needs of the nation for currency.

The least used monetary policy instrument used by the Fed is

The principle examining activity of the Federal Reserve System is directed to

The five components of the Federal Reserve System include:

____________________________ requires disclosure of the finance charge and the annual percentage rate of credit along with certain other costs and terms to permit consumers to compare the prices of credit from differing sources.

The Consumer Credit Protection Act requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

Before the Federal Reserve System was created, a large part of the reserves of commercial banks was

The Fed controls the _____ supply.

As of early 2019, nearly all the checks processed for collection by Federal Reserve Banks are still received as paper checks.

Under the authority of the Federal Reserve Act of 1913

The Federal Reserve Banks are owned by

The accommodative actions of the Fed includes buying treasury securities.

The most used monetary policy instrument used by the Fed is

One of the major weaknesses of the banking system before the Federal Reserve System was set up was

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