Exam 13: Money and the Banking System

Which of the following lists two things that both increase the money supply?

Excess reserves are

When the Federal Reserve sells government bonds to the public, it directly

In the United States, the purchasing power of money is determined by

Which of the following will cause the U.S. money supply to expand?

If the Fed wants to shift toward a more expansionary policy, it often announces that it is going to change the federal funds interest rate. The Fed controls the federal funds interest rate

If debit cards become more widely used by consumers and businesses, which of the following is most likely to happen?

Which of the following is true?

How do changes in open market operations alter the monetary base, and how do changes in the monetary base translate to changes in the money supply?

Which of the following compose the reserves of a commercial bank?

Commercial banks can borrow reserves directly from the Fed at the

What is the difference between the Treasury and the Federal Reserve? Is there any difference in the effect on the money supply between the sale of bonds by the Treasury and the sale of bonds by the Fed?

Which of the following will be classified as a liability on the balance sheet of a commercial bank?

During the financial crisis of 2008, Fed policy

Other things constant, if the Fed decreased the discount rate,

If many people were to suddenly deposit into their checking accounts large sums of cash previously held in their homes and/or wallets, and there were no offsetting actions by the Fed or change in institutional policies, this would

In response to the recession of 2008-2009, the Fed doubled its asset holdings from $925 billion at mid-year 2008 to more than $2 trillion by mid-year 2009. This policy

Under current policy, the Fed ties the discount rate to the

When a commercial bank borrows from a Federal Reserve bank,

During the economic crisis of 2008, the Fed acquired the authority to