Question 1

Under the European System of Central Banks,the Governing Council is similar in structure to the ________ of the Federal Reserve System.

Accepted Answer

A) Board of Governors 
B) Federal Open Market Committee 
C) Federal Reserve Banks 
D) Federal Advisory Council 
A) Board of Governors 
B) Federal Open Market Committee 
C) Federal Reserve Banks 
D) Federal Advisory Council

Question 2

Members of the Executive Board of the European System of Central Banks are appointed to ________ year,nonrenewable terms.

Accepted Answer

A) four 
B) eight 
C) ten 
D) fourteen 
A) four 
B) eight 
C) ten 
D) fourteen

Question 3

Banks subject to reserve requirements set by the Federal Reserve System include

Accepted Answer

A) only nationally chartered banks. 
B) only banks with assets less than $100 million. 
C) only banks with assets less than $500 million. 
D) all banks whether or not they are members of the Federal Reserve System. 
A) only nationally chartered banks. 
B) only banks with assets less than $100 million. 
C) only banks with assets less than $500 million. 
D) all banks whether or not they are members of the Federal Reserve System.

Question 4

Each Federal Reserve bank has nine directors. Of these ________ are appointed by the member banks and ________ are appointed by the Board of Governors.

Accepted Answer

A) three;six 
B) four;five 
C) five;four 
D) six;three 
A) three;six 
B) four;five 
C) five;four 
D) six;three

Question 5

Which of the following is an entity of the Federal Reserve System?

Accepted Answer

A) the U.S. Treasury Secretary 
B) the FOMC 
C) the Comptroller of the Currency 
D) the FDIC 
A) the U.S. Treasury Secretary 
B) the FOMC 
C) the Comptroller of the Currency 
D) the FDIC

Question 6

The trend in recent years is that more and more governments

Accepted Answer

A) have been granting greater independence to their central banks. 
B) have been reducing the independence of their central banks to make them more accountable for poor economic performance. 
C) have mandated that their central banks focus on controlling inflation. 
D) have required their central banks to cooperate more with their Ministers of Finance. 
A) have been granting greater independence to their central banks. 
B) have been reducing the independence of their central banks to make them more accountable for poor economic performance. 
C) have mandated that their central banks focus on controlling inflation. 
D) have required their central banks to cooperate more with their Ministers of Finance.

Question 7

Make the case for and against an independent Federal Reserve.

Accepted Answer

Case for: 
1. An independent Federal Res

Question 8

All ________ are required to be members of the Fed.

Accepted Answer

A) state chartered banks 
B) national banks chartered by the Office of the Comptroller of the Currency 
C) banks with assets less than $100 million 
D) banks with assets less than $500 million 
A) state chartered banks 
B) national banks chartered by the Office of the Comptroller of the Currency 
C) banks with assets less than $100 million 
D) banks with assets less than $500 million

Question 9

Prior to 1980,member banks left the Federal Reserve System due to

Accepted Answer

A) the high cost of discount loans. 
B) the high cost of required reserves. 
C) a desire to avoid interest rate regulations. 
D) a desire to avoid credit controls. 
A) the high cost of discount loans. 
B) the high cost of required reserves. 
C) a desire to avoid interest rate regulations. 
D) a desire to avoid credit controls.

Question 10

The Chairman of the Board of Governors is chosen from among the seven governors and serves a ________,renewable term.

Accepted Answer

A) one-year 
B) two-year 
C) four-year 
D) eight-year 
A) one-year 
B) two-year 
C) four-year 
D) eight-year

Question 11

Recent research indicates that inflation performance (low inflation)has been found to be best in countries with

Accepted Answer

A) the most independent central banks. 
B) political control of monetary policy. 
C) money financing of budget deficits. 
D) a policy of always keeping interest rates low. 
A) the most independent central banks. 
B) political control of monetary policy. 
C) money financing of budget deficits. 
D) a policy of always keeping interest rates low.

Question 12

The Federal Open Market Committee usually meets ________ times a year.

Accepted Answer

A) four 
B) six 
C) eight 
D) twelve 
A) four 
B) six 
C) eight 
D) twelve

Question 13

On paper,the Bank of Canada has ________ instrument independence and ________ goal independence when compared to the Federal Reserve System.

Accepted Answer

A) less;less 
B) less;more 
C) more;less 
D) more;more 
A) less;less 
B) less;more 
C) more;less 
D) more;more

Question 14

Why does the Federal Reserve Bank of New York play a special role within the Federal Reserve System?

Accepted Answer

The New York district contains the large

Question 15

The Federal Reserve Bank of ________ houses the open market desk.

Accepted Answer

A) Boston 
B) New York 
C) Chicago 
D) San Francisco 
A) Boston 
B) New York 
C) Chicago 
D) San Francisco

Question 16

The strongest argument for an independent Federal Reserve rests on the view that subjecting the Fed to more political pressures would impart

Accepted Answer

A) an inflationary bias to monetary policy. 
B) a deflationary bias to monetary policy. 
C) a disinflationary bias to monetary policy. 
D) a countercyclical bias to monetary policy. 
A) an inflationary bias to monetary policy. 
B) a deflationary bias to monetary policy. 
C) a disinflationary bias to monetary policy. 
D) a countercyclical bias to monetary policy.

Question 17

Which of the following statements comparing the European System of Central Banks and the Federal Reserve System is TRUE?

Accepted Answer

A) The budgets of the Federal Reserve Banks are controlled by the Board of Governors,while the National Central Banks control their own budgets and the budget of the European Central Bank. 
B) The European Central Bank has similar power over the National Central Banks when compared to the level of power the Board of Governors has over the Federal Reserve Banks. 
C) Just like the Federal Reserve System,monetary operations are centralized in the European System of Central Banks with the European Central Bank. 
D) None of the above. 
A) The budgets of the Federal Reserve Banks are controlled by the Board of Governors,while the National Central Banks control their own budgets and the budget of the European Central Bank. 
B) The European Central Bank has similar power over the National Central Banks when compared to the level of power the Board of Governors has over the Federal Reserve Banks. 
C) Just like the Federal Reserve System,monetary operations are centralized in the European System of Central Banks with the European Central Bank. 
D) None of the above.

Question 18

Explain the similarities and differences between the European System of Central Banks and the Federal Reserve System.

Accepted Answer

The similarities between the two are in

Question 19

The Federal Reserve Banks are ________ institutions since they are owned by the ________.

Accepted Answer

A) quasi-public;private commercial banks in the district where the Reserve Bank is located 
B) public;private commercial banks in the district where the Reserve Bank is located 
C) quasi-public;Board of Governors 
D) public;Board of Governors 
A) quasi-public;private commercial banks in the district where the Reserve Bank is located 
B) public;private commercial banks in the district where the Reserve Bank is located 
C) quasi-public;Board of Governors 
D) public;Board of Governors

Question 20

The research document given to the Federal Open Market Committee that contains information on the state of the economy in each Federal Reserve district is called the

Accepted Answer

A) beige book. 
B) green book. 
C) blue book. 
D) black book. 
A) beige book. 
B) green book. 
C) blue book. 
D) black book.

Exam 13: Central Banks and the Federal Reserve System

Under the European System of Central Banks,the Governing Council is similar in structure to the ________ of the Federal Reserve System.

Members of the Executive Board of the European System of Central Banks are appointed to ________ year,nonrenewable terms.

Banks subject to reserve requirements set by the Federal Reserve System include

Each Federal Reserve bank has nine directors. Of these ________ are appointed by the member banks and ________ are appointed by the Board of Governors.

Which of the following is an entity of the Federal Reserve System?

The trend in recent years is that more and more governments

Make the case for and against an independent Federal Reserve.

All ________ are required to be members of the Fed.

Prior to 1980,member banks left the Federal Reserve System due to

The Chairman of the Board of Governors is chosen from among the seven governors and serves a ________,renewable term.

Recent research indicates that inflation performance (low inflation)has been found to be best in countries with

The Federal Open Market Committee usually meets ________ times a year.

On paper,the Bank of Canada has ________ instrument independence and ________ goal independence when compared to the Federal Reserve System.

Why does the Federal Reserve Bank of New York play a special role within the Federal Reserve System?

The Federal Reserve Bank of ________ houses the open market desk.

The strongest argument for an independent Federal Reserve rests on the view that subjecting the Fed to more political pressures would impart

Which of the following statements comparing the European System of Central Banks and the Federal Reserve System is TRUE?

Explain the similarities and differences between the European System of Central Banks and the Federal Reserve System.

The Federal Reserve Banks are ________ institutions since they are owned by the ________.

The research document given to the Federal Open Market Committee that contains information on the state of the economy in each Federal Reserve district is called the

Why Study Money, banking, and Financial Markets

An Overview of the Financial System

What Is Money

The Meaning of Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Financial Crises

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Market Economies

The ISLM Model

Filters

Each Federal Reserve bank has nine directors. Of these are appointed by the member banks and are appointed by the Board of Governors.

On paper,the Bank of Canada has instrument independence and goal independence when compared to the Federal Reserve System.

The Federal Reserve Banks are institutions since they are owned by the .