Question 1

Absent action by the (Open Market) Desk, an increase in the public's holdings of currency will

Accepted Answer

A)  Increase the supply of reserves 
B)  Reduce the supply of reserves 
C)  Leave the supply of reserves unchanged 
D)  Not enough information to be able to answer 
A)  Increase the supply of reserves 
B)  Reduce the supply of reserves 
C)  Leave the supply of reserves unchanged 
D)  Not enough information to be able to answer B

Question 2

Which of the following is not an instrument of monetary policy?

Accepted Answer

A)  Reserve requirements 
B)  Margin requirements on stocks 
C)  Discount policy 
D)  Open market operations 
A)  Reserve requirements 
B)  Margin requirements on stocks 
C)  Discount policy 
D)  Open market operations B

Question 3

Which of the following was not an original responsibility of the Federal Reserve?

Accepted Answer

A)  Issue currency (Federal reserve notes) 
B)  Conduct monetary policy 
C)  Smooth seasonal variations in credit availability and interest rates 
D)  Limit the extent of banking panics (financial crises) 
A)  Issue currency (Federal reserve notes) 
B)  Conduct monetary policy 
C)  Smooth seasonal variations in credit availability and interest rates 
D)  Limit the extent of banking panics (financial crises) B

Question 4

The U.S. Constitution assigns responsibility for monetary policy to

Accepted Answer

A)  The Executive Branch 
B)  Congress 
C)  The Treasury 
D)  The Federal Reserve 
A)  The Executive Branch 
B)  Congress 
C)  The Treasury 
D)  The Federal Reserve

Question 5

The FOMC implements its policies by

Accepted Answer

A)  Changing the discount rate 
B)  Changing reserve requirements 
C)  Affecting nonborrowed reserves 
D)  Affecting Federal Reserve float 
A)  Changing the discount rate 
B)  Changing reserve requirements 
C)  Affecting nonborrowed reserves 
D)  Affecting Federal Reserve float

Question 6

Which of the following transactions will add to the supply of reserves in the banking system?

Accepted Answer

A)  An outright sale of securities by the Fed 
B)  A reverse RP 
C)  An RP 
D)  None of the above 
A)  An outright sale of securities by the Fed 
B)  A reverse RP 
C)  An RP 
D)  None of the above

Question 7

Which of the following is not a feature of Federal Reserve independence?

Accepted Answer

A)  Selection of the final goals of monetary policy 
B)  14-year terms of Board members 
C)  Outside the congressional appropriations process 
D)  Exempt from General Accountability Office (GAO) audit of monetary policy 
A)  Selection of the final goals of monetary policy 
B)  14-year terms of Board members 
C)  Outside the congressional appropriations process 
D)  Exempt from General Accountability Office (GAO) audit of monetary policy

Question 8

The number of persons with the title of "Governor" in the Federal Reserve System

Accepted Answer

A)  Was 13 prior to the mid-1930s 
B)  Has been 7 since the mid-1930s 
C)  Is 1, like many other central banks 
D)  Both a and b 
A)  Was 13 prior to the mid-1930s 
B)  Has been 7 since the mid-1930s 
C)  Is 1, like many other central banks 
D)  Both a and b

Question 9

Federal Reserve System contains

Accepted Answer

A)  12 Reserve Banks 
B)  Board of Governors 
C)  Federal Open Market Committee (FOM
C)  
D)  All of the above 
A)  12 Reserve Banks 
B)  Board of Governors 
C)  Federal Open Market Committee (FOM
C)  
D)  All of the above

Question 10

Equilibrium in the market for reserves is achieved when

Accepted Answer

A)  The discount rate equals the interest rate paid on excess reserves 
B)  Required reserves plus excess reserves equals nonborrowed plus borrowed reserves 
C)  Borrowed reserve are zero 
D)  The discount rate is below the interest rate paid on excess reserves 
A)  The discount rate equals the interest rate paid on excess reserves 
B)  Required reserves plus excess reserves equals nonborrowed plus borrowed reserves 
C)  Borrowed reserve are zero 
D)  The discount rate is below the interest rate paid on excess reserves

Absent action by the (Open Market) Desk, an increase in the public's holdings of currency will

Which of the following is not an instrument of monetary policy?

Which of the following was not an original responsibility of the Federal Reserve?

The U.S. Constitution assigns responsibility for monetary policy to

The FOMC implements its policies by

Which of the following transactions will add to the supply of reserves in the banking system?

Which of the following is not a feature of Federal Reserve independence?

The number of persons with the title of "Governor" in the Federal Reserve System

Federal Reserve System contains

Equilibrium in the market for reserves is achieved when

Introduction

Overview of the Financial System

The Special Role of Commercial Banks

Factors Affecting Yields

Principles of Portfolio Selection and Efficient Markets

The Money Market

The Bond Market

Securitization

The Mortgage Market

The Equity Market

Monetary Policy: The Basics

Monetary Policy: Challenges Faced by Policymakers

Financial Crises

The Foreign Exchange Market and Exchange Rate Regimes

Depository Institutions

The Pricing of Financial Assets

Mutual Funds

Hedge, Venture Capital, and Private Equity Funds

Large Institutional Investors

Filters

Exam 12: Central Banking and the Federal Reserve

Absent action by the (Open Market) Desk, an increase in the public's holdings of currency will

Which of the following is not an instrument of monetary policy?

Which of the following was not an original responsibility of the Federal Reserve?

The U.S. Constitution assigns responsibility for monetary policy to

The FOMC implements its policies by

Which of the following transactions will add to the supply of reserves in the banking system?

Which of the following is not a feature of Federal Reserve independence?

The number of persons with the title of "Governor" in the Federal Reserve System

Federal Reserve System contains

Equilibrium in the market for reserves is achieved when

Introduction

Overview of the Financial System

The Special Role of Commercial Banks

Factors Affecting Yields

Principles of Portfolio Selection and Efficient Markets

The Money Market

The Bond Market

Securitization

The Mortgage Market

The Equity Market

Monetary Policy: The Basics

Monetary Policy: Challenges Faced by Policymakers

Financial Crises

The Foreign Exchange Market and Exchange Rate Regimes

Depository Institutions

The Pricing of Financial Assets

Mutual Funds

Hedge, Venture Capital, and Private Equity Funds

Large Institutional Investors

Filters