Exam 12: Exploring Central Banks and Their Impact on the Economy and Financial System

The Federal Reserve System depends upon the U.S. government for income to operate.

The national economic goal of sustained growth tends to conflict, according to your text, with the goal of:

Which of the following actions does not improve the transparency of a central bank?

Which role(s) of central banks is/are described in each example below? a. Shipments of currency are being made to banks in the region due to unusually heavy withdrawals by the public. b. Several banks in the region are being subjected to a follow-up examination due to problems unearthed by central bank examiners on a visit last month. c. Unexpectedly heavy demand for funds by the public associated with a decline in stock prices resulted in a significant increase in depository institutions' seeking funds from the central bank. d. Concerned over an apparent increase in the cost of living (consumer price index) and above-average rate of growth in transaction deposits the central bank moves to slow the latter through a combination of restrictive policy-directed actions in the financial markets. e. Dealers in government securities suddenly face a shortage of available loans and a rise in borrowing costs which the central bank moves to counteract immediately.

Economies generally perform better (at least in terms of price stability) in those countries where central banks:

Member banks of the Federal Reserve System are entitled to receive a 6 percent dividend on the Federal Reserve bank stock they hold and may elect a majority of the directors of the Federal Reserve bank in their district.

Once the European Central Bank is operating efficiently, the central banks of the EU nations will be converted to large, universal-style, commercial banks.

The role or function performed by the Federal Reserve banks in which they record or keep the operating financial accounts of the U.S. Treasury and deliver and redeem U.S. government securities is known as the Fed's ____ function.

Independence from government control enjoyed by central banks varies widely around the world.

Members of the Federal Reserve System include:

The National Banking Act set up the Federal Reserve System.

The most important measure of the money supply which includes transaction deposits, currency and coin and other liquid assets principally held by households is referred to as:

The principal policy tool of the Federal Reserve System in influencing economic and financial conditions is:

Global trends affecting many central banks today include:

According to the EU's plan, the central banks of the 11 EU nations will:

Many central banks around the world play similar roles in their respective countries, including:

Banks will sometimes maintain excess reserves to meet unexpected withdrawals without falling below their required reserve holdings, which is referred to as:

Economists refer to the legal bank reserves plus the currency in the hands of the public as:

Which of the following is not a reason the Fed began charging a fee for its services?

In what ways can the Federal Reserve System or any central bank influence the money and credit creation process?