Question 1

Which of the following is NOT considered one of the four groups in the Federal Reserve System?

Accepted Answer

A)  Federal Reserve banks 
B)  Federal Deposit Insurance Corporation 
C)  Board of Governors 
D)  Federal Open Market Committee 
A)  Federal Reserve banks 
B)  Federal Deposit Insurance Corporation 
C)  Board of Governors 
D)  Federal Open Market Committee

Question 2

Congress authorized the Second Bank of the United States partly in response to

Accepted Answer

A)  difficulty in funding the American Revolution. 
B)  difficulty in funding the War of 1812. 
C)  difficulty in funding the Industrial Revolution. 
D)  difficulty in funding the Civil War. 
A)  difficulty in funding the American Revolution. 
B)  difficulty in funding the War of 1812. 
C)  difficulty in funding the Industrial Revolution. 
D)  difficulty in funding the Civil War.

Question 3

What constitutes meaningful independence of a central bank?

Accepted Answer

The central bank must be able

Question 4

Assuming a required reserve ratio of 8%,interest rate on reserves of 0.5%,and interest rate on loans of 4%,what is the effective cost of the reserve requirement on a $1,000 deposit?

Accepted Answer

A)  0.05% 
B)  0.28% 
C)  0.32% 
D)  4% 
A)  0.05% 
B)  0.28% 
C)  0.32% 
D)  4%

Question 5

Why did fewer state banks choose to become or remain members of the Federal Reserve System during the 1960s and 1970s?

Accepted Answer

A)  Nominal interest rates rose. 
B)  The required reserve ratio rose. 
C)  The discount rate rose. 
D)  Open market operations declined. 
A)  Nominal interest rates rose. 
B)  The required reserve ratio rose. 
C)  The discount rate rose. 
D)  Open market operations declined.

Question 6

In 1913,Congress and the president did not envision that the Fed would control

Accepted Answer

A)  the money supply. 
B)  discount loans. 
C)  lender-of-last-resort activity. 
D)  broad control over most aspects of money and the banking system. 
A)  the money supply. 
B)  discount loans. 
C)  lender-of-last-resort activity. 
D)  broad control over most aspects of money and the banking system.

Question 7

Assuming a required reserve ratio of 5%,interest rate on reserves of 1%,and interest rate on loans of 6%,what is the effective cost of the reserve requirement on a $10,000 deposit?

Accepted Answer

A)  0.05% 
B)  0.25% 
C)  0.30% 
D)  1% 
A)  0.05% 
B)  0.25% 
C)  0.30% 
D)  1%

Question 8

The members of Federal Reserve district bank boards of directors appointed by the Board of Governors are known as

Accepted Answer

A)  Class A directors. 
B)  Class B directors. 
C)  Class C directors. 
D)  Class D directors. 
A)  Class A directors. 
B)  Class B directors. 
C)  Class C directors. 
D)  Class D directors.

Question 9

Members of the Board of Governors

Accepted Answer

A)  must resign when the President who has appointed them leaves office. 
B)  may serve no more than three consecutive four-year terms. 
C)  serve for life or good behavior. 
D)  serve one nonrenewable fourteen-year term. 
A)  must resign when the President who has appointed them leaves office. 
B)  may serve no more than three consecutive four-year terms. 
C)  serve for life or good behavior. 
D)  serve one nonrenewable fourteen-year term.

Question 10

Who organized the Bank of the United States?

Accepted Answer

A)  Alexander Hamilton 
B)  George Washington 
C)  Andrew Jackson 
D)  Woodrow Wilson 
A)  Alexander Hamilton 
B)  George Washington 
C)  Andrew Jackson 
D)  Woodrow Wilson

Question 11

What is the main reason the Fed operates in a political arena?

Accepted Answer

A)  It lacks a constitutional mandate. 
B)  The members of the Board of Governors must run for reelection every fourteen years. 
C)  The members of the Board of Governors are typically prominent politicians. 
D)  It is under the direct control of Congress. 
A)  It lacks a constitutional mandate. 
B)  The members of the Board of Governors must run for reelection every fourteen years. 
C)  The members of the Board of Governors are typically prominent politicians. 
D)  It is under the direct control of Congress.

Question 12

Who serve as voting members of the Federal Open Market Committee (FOMC)?

Accepted Answer

Voting members of the FOMC inc

Question 13

During World War II

Accepted Answer

A)  the Board of Governors was temporarily disbanded. 
B)  the Fed was not allowed to make discount loans. 
C)  the Fed agreed to hold interest rates on short-term Treasury securities at low levels. 
D)  the Fed agreed not to buy Treasury securities. 
A)  the Board of Governors was temporarily disbanded. 
B)  the Fed was not allowed to make discount loans. 
C)  the Fed agreed to hold interest rates on short-term Treasury securities at low levels. 
D)  the Fed agreed not to buy Treasury securities.

Question 14

Which of the following is the most common goal for central banks of industrialized countries?

Accepted Answer

A)  high employment 
B)  high economic growth 
C)  low interest rates 
D)  low inflation 
A)  high employment 
B)  high economic growth 
C)  low interest rates 
D)  low inflation

Question 15

Which central bank gained the power to set interest rates independent of the government in the late 1990s?

Accepted Answer

A)  Bank of England 
B)  Bank of Canada 
C)  Bank of China 
D)  Federal Reserve Bank 
A)  Bank of England 
B)  Bank of Canada 
C)  Bank of China 
D)  Federal Reserve Bank

Question 16

Private banks in each region which are part of the Federal Reserve System elect

Accepted Answer

A)  2 members of the regional Reserve Bank's board of directors. 
B)  3 members of the regional Reserve Bank's board of directors. 
C)  6 members of the regional Reserve Bank's board of directors. 
D)  the president of the regional Reserve Bank's board of directors. 
A)  2 members of the regional Reserve Bank's board of directors. 
B)  3 members of the regional Reserve Bank's board of directors. 
C)  6 members of the regional Reserve Bank's board of directors. 
D)  the president of the regional Reserve Bank's board of directors.

Question 17

The public interest view of Fed motivation holds that the Fed acts in the interest of

Accepted Answer

A)  the general public. 
B)  banks. 
C)  Congress. 
D)  itself. 
A)  the general public. 
B)  banks. 
C)  Congress. 
D)  itself.

Question 18

Generally

Accepted Answer

A)  countries with the most independent central banks have the lowest inflation rates. 
B)  countries with the least independent central banks have the lowest inflation rates. 
C)  countries without central banks have the lowest inflation rates. 
D)  the degree of independence of a country's central banks has little to do with its inflation rate. 
A)  countries with the most independent central banks have the lowest inflation rates. 
B)  countries with the least independent central banks have the lowest inflation rates. 
C)  countries without central banks have the lowest inflation rates. 
D)  the degree of independence of a country's central banks has little to do with its inflation rate.

Question 19

The members of Federal Reserve district bank boards of directors who are bankers are known as

Accepted Answer

A)  Class A directors. 
B)  Class B directors. 
C)  Class C directors. 
D)  Class D directors. 
A)  Class A directors. 
B)  Class B directors. 
C)  Class C directors. 
D)  Class D directors.

Question 20

If a member of the Board of Governors is limited to one 14-year term,how did Alan Greenspan serve 19 years on the Board of Governors?

Accepted Answer

A)  A special exemption was approved for him. 
B)  The rule was not in place at the time. 
C)  He completed the remaining years left on someone else's term and then served one 14-year term. 
D)  He didn't serve consecutive terms. 
A)  A special exemption was approved for him. 
B)  The rule was not in place at the time. 
C)  He completed the remaining years left on someone else's term and then served one 14-year term. 
D)  He didn't serve consecutive terms.

Which of the following is NOT considered one of the four groups in the Federal Reserve System?

Congress authorized the Second Bank of the United States partly in response to

What constitutes meaningful independence of a central bank?

Assuming a required reserve ratio of 8%,interest rate on reserves of 0.5%,and interest rate on loans of 4%,what is the effective cost of the reserve requirement on a $1,000 deposit?

Why did fewer state banks choose to become or remain members of the Federal Reserve System during the 1960s and 1970s?

In 1913,Congress and the president did not envision that the Fed would control

Assuming a required reserve ratio of 5%,interest rate on reserves of 1%,and interest rate on loans of 6%,what is the effective cost of the reserve requirement on a $10,000 deposit?

The members of Federal Reserve district bank boards of directors appointed by the Board of Governors are known as

Members of the Board of Governors

Who organized the Bank of the United States?

What is the main reason the Fed operates in a political arena?

Who serve as voting members of the Federal Open Market Committee (FOMC)?

During World War II

Which of the following is the most common goal for central banks of industrialized countries?

Which central bank gained the power to set interest rates independent of the government in the late 1990s?

Private banks in each region which are part of the Federal Reserve System elect

The public interest view of Fed motivation holds that the Fed acts in the interest of

Generally

The members of Federal Reserve district bank boards of directors who are bankers are known as

If a member of the Board of Governors is limited to one 14-year term,how did Alan Greenspan serve 19 years on the Board of Governors?

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

Exam 13: The Federal Reserve and Central Banking

Which of the following is NOT considered one of the four groups in the Federal Reserve System?

Congress authorized the Second Bank of the United States partly in response to

What constitutes meaningful independence of a central bank?

Assuming a required reserve ratio of 8%,interest rate on reserves of 0.5%,and interest rate on loans of 4%,what is the effective cost of the reserve requirement on a $1,000 deposit?

Why did fewer state banks choose to become or remain members of the Federal Reserve System during the 1960s and 1970s?

In 1913,Congress and the president did not envision that the Fed would control

Assuming a required reserve ratio of 5%,interest rate on reserves of 1%,and interest rate on loans of 6%,what is the effective cost of the reserve requirement on a $10,000 deposit?

The members of Federal Reserve district bank boards of directors appointed by the Board of Governors are known as

Members of the Board of Governors

Who organized the Bank of the United States?

What is the main reason the Fed operates in a political arena?

Who serve as voting members of the Federal Open Market Committee (FOMC)?

During World War II

Which of the following is the most common goal for central banks of industrialized countries?

Which central bank gained the power to set interest rates independent of the government in the late 1990s?

Private banks in each region which are part of the Federal Reserve System elect

The public interest view of Fed motivation holds that the Fed acts in the interest of

Generally

The members of Federal Reserve district bank boards of directors who are bankers are known as

If a member of the Board of Governors is limited to one 14-year term,how did Alan Greenspan serve 19 years on the Board of Governors?

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters