Question 1

The majority of members of the Federal Open Market Committee are

Accepted Answer

A) Federal Reserve Bank presidents. 
B) members of the Federal Advisory Council. 
C) presidents of member banks. 
D) the seven members of the Board of Governors. 
A) Federal Reserve Bank presidents. 
B) members of the Federal Advisory Council. 
C) presidents of member banks. 
D) the seven members of the Board of Governors.

Question 2

Which of the following statements about central bank structure and independence is TRUE?

Accepted Answer

A) In recent years,with the exception of the Bank of England and the Bank of Japan,most countries have reduced the independence of their central banks,subjecting them to greater democratic control. 
B) Before the Bank of England was granted greater independence,the Federal Reserve was the most independent of the world's central banks. 
C) Both theory and experience suggest that more independent central banks produce better monetary policy. 
D) While the European Central Bank is independent,it is not as independent as the Federal Reserve. 
A) In recent years,with the exception of the Bank of England and the Bank of Japan,most countries have reduced the independence of their central banks,subjecting them to greater democratic control. 
B) Before the Bank of England was granted greater independence,the Federal Reserve was the most independent of the world's central banks. 
C) Both theory and experience suggest that more independent central banks produce better monetary policy. 
D) While the European Central Bank is independent,it is not as independent as the Federal Reserve.

Question 3

The central bank which is generally regarded as the most independent in the world because its charter cannot be changed by legislation is the

Accepted Answer

A) Bank of England. 
B) Bank of Canada. 
C) European Central Bank. 
D) Bank of Japan. 
A) Bank of England. 
B) Bank of Canada. 
C) European Central Bank. 
D) Bank of Japan.

Question 4

The ability of a central bank to set monetary policy instruments is

Accepted Answer

A) political independence. 
B) goal independence. 
C) policy independence. 
D) instrument independence. 
A) political independence. 
B) goal independence. 
C) policy independence. 
D) instrument independence.

Question 5

Critics of the current system of Fed independence contend that

Accepted Answer

A) the current system is undemocratic. 
B) voters have too much say about monetary policy. 
C) the president has too much control over monetary policy on a day-to-day basis. 
D) the Board of Governors is held responsible for policy missteps. 
A) the current system is undemocratic. 
B) voters have too much say about monetary policy. 
C) the president has too much control over monetary policy on a day-to-day basis. 
D) the Board of Governors is held responsible for policy missteps.

Question 6

The political business cycle refers to the phenomenon that just before elections,politicians enact ________ policies. After the elections,the bad effects of these policies (for example,________ )have to be counteracted with ________ policies.

Accepted Answer

A) expansionary;higher unemployment;contractionary 
B) expansionary;a higher inflation rate;contractionary 
C) contractionary;higher unemployment;expansionary 
D) contractionary;a higher inflation rate;expansionary 
A) expansionary;higher unemployment;contractionary 
B) expansionary;a higher inflation rate;contractionary 
C) contractionary;higher unemployment;expansionary 
D) contractionary;a higher inflation rate;expansionary

Question 7

Under the European System of Central Banks,the National Central Banks have the same role as 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 8

The Federal Open Market Committee's "balance of risks" is an assessment of whether,in the future,its primary concern will be

Accepted Answer

A) higher exchange rates or higher unemployment. 
B) higher inflation or a stronger economy. 
C) higher inflation or a weaker economy. 
D) lower inflation or a stronger economy. 
A) higher exchange rates or higher unemployment. 
B) higher inflation or a stronger economy. 
C) higher inflation or a weaker economy. 
D) lower inflation or a stronger economy.

Question 9

Explain two concepts of central bank independence. Is the Fed politically independent? Why do economists think central bank independence is important?

Accepted Answer

Instrument independence is the ability o

Question 10

Of all commercial banks,about ________ belong to the Federal Reserve System.

Accepted Answer

A) 10% 
B) one half 
C) one third 
D) 90% 
A) 10% 
B) one half 
C) one third 
D) 90%

Question 11

The Depository Institutions Deregulation and Monetary Control Act of 1980

Accepted Answer

A) established higher reserve requirements for nonmember than for member banks. 
B) established higher reserve requirements for member than for nonmember banks. 
C) abolished reserve requirements. 
D) established uniform reserve requirements for all banks. 
A) established higher reserve requirements for nonmember than for member banks. 
B) established higher reserve requirements for member than for nonmember banks. 
C) abolished reserve requirements. 
D) established uniform reserve requirements for all banks.

The majority of members of the Federal Open Market Committee are

Which of the following statements about central bank structure and independence is TRUE?

The central bank which is generally regarded as the most independent in the world because its charter cannot be changed by legislation is the

The ability of a central bank to set monetary policy instruments is

Critics of the current system of Fed independence contend that

The political business cycle refers to the phenomenon that just before elections,politicians enact policies. After the elections,the bad effects of these policies (for example, )have to be counteracted with policies.

Under the European System of Central Banks,the National Central Banks have the same role as the ________ of the Federal Reserve System.

The Federal Open Market Committee's "balance of risks" is an assessment of whether,in the future,its primary concern will be

Explain two concepts of central bank independence. Is the Fed politically independent? Why do economists think central bank independence is important?

Of all commercial banks,about ________ belong to the Federal Reserve System.

The Depository Institutions Deregulation and Monetary Control Act of 1980

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

Exam 13: Central Banks and the Federal Reserve System

The majority of members of the Federal Open Market Committee are

Which of the following statements about central bank structure and independence is TRUE?

The central bank which is generally regarded as the most independent in the world because its charter cannot be changed by legislation is the

The ability of a central bank to set monetary policy instruments is

Critics of the current system of Fed independence contend that

The political business cycle refers to the phenomenon that just before elections,politicians enact ________ policies. After the elections,the bad effects of these policies (for example,________ )have to be counteracted with ________ policies.

Under the European System of Central Banks,the National Central Banks have the same role as the ________ of the Federal Reserve System.

The Federal Open Market Committee's "balance of risks" is an assessment of whether,in the future,its primary concern will be

Explain two concepts of central bank independence. Is the Fed politically independent? Why do economists think central bank independence is important?

Of all commercial banks,about ________ belong to the Federal Reserve System.

The Depository Institutions Deregulation and Monetary Control Act of 1980

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

The political business cycle refers to the phenomenon that just before elections,politicians enact policies. After the elections,the bad effects of these policies (for example, )have to be counteracted with policies.