Exam 13: Central Banking and Monetary Policy: Exploring Tools and Strategies

There are no options available to banks who want to borrow from the Fed, but do not want to do so through the discount window.

Nearly all central banks appear to work through changes in the total reserves available to the banking system.

If the Federal Reserve decides to purchase securities from the Bank of England at the latter's request and the Fed adds those securities to its portfolio then which of the following effects will occur?

If the Federal Reserve sells securities from its own portfolio to accommodate the request for securities made by a foreign central bank, then which of the following effects would ensure?

Fiscal Policy refers to:

Frictional unemployment which arises from temporary unemployment of jobseekers who are either new to the workforce or who are in transition from one job to another, is also referred to as:

The type of open-market operation that brings about a temporary change in the level of reserves held by depository institutions is known as a(n):

Suppose the banking system's nonborrowed reserves total $75 billion with total legal reserves standing at $98 billion. The Fed buys $5 billion of securities in the open market. What will happen to the level of borrowed reserves?

The Bank of England imposes reserve requirements on private banks operating in Great Britain.

The discount rates charged by the Federal Reserve banks on loans to depository institutions is lowest for seasonal credit.

Most central banks, including the Fed, have specific inflation-level and employment-level targets they strive to meet.

The heart of the monetary policy process is to estimate correctly the needed level of money in the economy.

If the Fed increases the margin requirement, investors can borrow a larger percentage of the cost of a stock purchase.

Borrowed reserves are defined as reserves that have been borrowed:

Reserve requirements are typically changed daily in order to keep the financial system on its toes.

A Federal Reserve open-market operation designed to keep the present pattern of interest rates and credit availability about where they are is known as a:

The Bank of Japan does not use security trading as a monetary policy tool.

The U.S. Treasury buys and sells U.S. Treasury securities for foreign central banks.

What are the principal limitations of monetary policy?

A decrease in reserve-absorbing factors results in an increase in total legal reserves of the banking system.