Question 1

Since the late 1970s,the Federal Discount Rate has generally exceeded the Prime Interest Rate by a few percentage points.

Accepted Answer

A) True 
 B)False

Question 2

The Truth in Lending Act:

Accepted Answer

A) prohibits discrimination in the granting of credit on the basis of sex,race,color,and religion 
B) limits liability on lost or stolen credit cards 
C) prohibits unfair or deceptive acts or practices on the part of banks 
D) requires prompt correction of errors on a revolving charge account 
A) prohibits discrimination in the granting of credit on the basis of sex,race,color,and religion 
B) limits liability on lost or stolen credit cards 
C) prohibits unfair or deceptive acts or practices on the part of banks 
D) requires prompt correction of errors on a revolving charge account

Question 3

The least used monetary policy instrument used by the Fed is

Accepted Answer

A) open market operations 
B) changing the discount rate 
C) changing the reserve requirement 
D) none of the above 
A) open market operations 
B) changing the discount rate 
C) changing the reserve requirement 
D) none of the above

Question 4

The Federal Open Market Committee directs open market operations by buying and selling government securities which are the primary instruments of exercising monetary policy.

Accepted Answer

A) True 
 B)False

Question 5

The chairman of the Federal Reserve System:

Accepted Answer

A) is appointed by the Secretary of the Treasury 
B) serves a life term 
C) is the president of the New York Federal Reserve Bank 
D) none of the above 
A) is appointed by the Secretary of the Treasury 
B) serves a life term 
C) is the president of the New York Federal Reserve Bank 
D) none of the above

Question 6

The National Banking Acts of 1863 and 1864 were:

Accepted Answer

A) totally eliminated under the Federal Reserve Act of 1913 
B) were modified to permit greater flexibility of operations under the Federal Reserve Act of 1913 
C) were unaffected by the Federal Reserve Act of 1913 
D) none of the above 
A) totally eliminated under the Federal Reserve Act of 1913 
B) were modified to permit greater flexibility of operations under the Federal Reserve Act of 1913 
C) were unaffected by the Federal Reserve Act of 1913 
D) none of the above

Question 7

Which of the following statements is true when describing Federal Reserve Banks?

Accepted Answer

A) they are located in each of the 50 states 
B) every Federal Reserve Bank has at least one branch 
C) they have been moved from city to city as the U.S.developed 
D) two Federal Reserve Banks are located in the same state 
A) they are located in each of the 50 states 
B) every Federal Reserve Bank has at least one branch 
C) they have been moved from city to city as the U.S.developed 
D) two Federal Reserve Banks are located in the same state

Question 8

Eligible paper that the borrowing institution can sell to the Reserve Bank includes:

Accepted Answer

A) common stock 
B) corporate bonds 
C) U.S.government bonds 
D) all of the above 
A) common stock 
B) corporate bonds 
C) U.S.government bonds 
D) all of the above

Question 9

Empirical evidence shows that in countries where central banks are relatively independent from their governments,there has been higher inflation and lower economic growth rates than in countries where central banks are closely tied to their governments.

Accepted Answer

A) True 
 B)False

Question 10

The ___________________ conducts monetary policy for the twelve European countries that formed the European Monetary Union and adopted the euro as their common currency at the beginning of 1999.

Accepted Answer

A) Bank of England 
B) European Central Bank 
C) Bank of Europe 
D) Bank of Switzerland 
E) none of the above 
A) Bank of England 
B) European Central Bank 
C) Bank of Europe 
D) Bank of Switzerland 
E) none of the above

Question 11

The Fed shares its depository examining functions with:

Accepted Answer

A) the Federal Savings and Loan Insurance Corporation 
B) the FDIC,Comptroller of the Currency,and state agencies 
C) only the Comptroller of the Currency 
D) National Credit Union administration and the FDIC 
A) the Federal Savings and Loan Insurance Corporation 
B) the FDIC,Comptroller of the Currency,and state agencies 
C) only the Comptroller of the Currency 
D) National Credit Union administration and the FDIC

Question 12

Three essential needs of a well-operating financial system include all of the following EXCEPT:

Accepted Answer

A) an efficient national payments system 
B) an elastic or flexible money supply 
C) a bank insurance system 
D) a lending/borrowing mechanism 
A) an efficient national payments system 
B) an elastic or flexible money supply 
C) a bank insurance system 
D) a lending/borrowing mechanism

Question 13

A central bank serves the nation:

Accepted Answer

A) as a source of consumer credit when otherwise not available 
B) by regulating money supply growth 
C) as a secondary source of funds for home financing 
D) as the strong right arm of the U.S.Treasury 
A) as a source of consumer credit when otherwise not available 
B) by regulating money supply growth 
C) as a secondary source of funds for home financing 
D) as the strong right arm of the U.S.Treasury

Question 14

Which monetary policy tool does the Fed use most infrequently?

Accepted Answer

A) changing reserve requirements 
B) changing the discount rate 
C) open market operations 
D) none of the above 
A) changing reserve requirements 
B) changing the discount rate 
C) open market operations 
D) none of the above

Question 15

The basic policy instruments that the Fed uses to execute monetary policy include all of the following EXCEPT

Accepted Answer

A) changing reserve requirements 
B) changing the discount rate 
C) conducting open market operations 
D) all of the above are monetary policy instruments 
A) changing reserve requirements 
B) changing the discount rate 
C) conducting open market operations 
D) all of the above are monetary policy instruments

Question 16

Total deposits can be contracted by holding the amount of reserves constant but raising the reserve requirement.

Accepted Answer

A) True 
 B)False

Question 17

The Federal Open Market Committee:

Accepted Answer

A) typically buys and sells long-term corporate bonds 
B) is the most powerful and flexible monetary policy tool of the Fed 
C) works out of Washington D.c. 
D) deals with most of the commercial banks of the nation 
A) typically buys and sells long-term corporate bonds 
B) is the most powerful and flexible monetary policy tool of the Fed 
C) works out of Washington D.c. 
D) deals with most of the commercial banks of the nation

Question 18

In response to the 2007 - 2009 financial crisis,the Fed's prime credit rate,which was 6.25 percent at the end of 2006,was lowered to _____ percent by the end of 2008 and was maintained at that level through 2009.

Accepted Answer

A) 0.0 
B) 0.5 
C) 1.0 
D) 1.5 
E) none of the above 
A) 0.0 
B) 0.5 
C) 1.0 
D) 1.5 
E) none of the above

Question 19

The Federal Open Market Committee:

Accepted Answer

A) is comprised of members of the Federal Reserve board and representatives of all Federal Reserve Banks 
B) came into being at the time the Federal Reserve System was created 
C) is made up of the presidents of the 12 Federal Reserve Banks 
D) was created under a provision of the Banking Act of 1935 
A) is comprised of members of the Federal Reserve board and representatives of all Federal Reserve Banks 
B) came into being at the time the Federal Reserve System was created 
C) is made up of the presidents of the 12 Federal Reserve Banks 
D) was created under a provision of the Banking Act of 1935

Question 20

The Federal Open Market committee:

Accepted Answer

A) establishes and administers protective consumer finance regulations 
B) furnishes currencies 
C) handles U.S.government debt and cash balances 
D) all the above 
E) none of the above 
A) establishes and administers protective consumer finance regulations 
B) furnishes currencies 
C) handles U.S.government debt and cash balances 
D) all the above 
E) none of the above

Since the late 1970s,the Federal Discount Rate has generally exceeded the Prime Interest Rate by a few percentage points.

The Truth in Lending Act:

The least used monetary policy instrument used by the Fed is

The Federal Open Market Committee directs open market operations by buying and selling government securities which are the primary instruments of exercising monetary policy.

The chairman of the Federal Reserve System:

The National Banking Acts of 1863 and 1864 were:

Which of the following statements is true when describing Federal Reserve Banks?

Eligible paper that the borrowing institution can sell to the Reserve Bank includes:

Empirical evidence shows that in countries where central banks are relatively independent from their governments,there has been higher inflation and lower economic growth rates than in countries where central banks are closely tied to their governments.

The ___________________ conducts monetary policy for the twelve European countries that formed the European Monetary Union and adopted the euro as their common currency at the beginning of 1999.

The Fed shares its depository examining functions with:

Three essential needs of a well-operating financial system include all of the following EXCEPT:

A central bank serves the nation:

Which monetary policy tool does the Fed use most infrequently?

The basic policy instruments that the Fed uses to execute monetary policy include all of the following EXCEPT

Total deposits can be contracted by holding the amount of reserves constant but raising the reserve requirement.

The Federal Open Market Committee:

In response to the 2007 - 2009 financial crisis,the Fed's prime credit rate,which was 6.25 percent at the end of 2006,was lowered to _____ percent by the end of 2008 and was maintained at that level through 2009.

The Federal Open Market Committee:

The Federal Open Market committee:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 4: Federal Reserve System

Since the late 1970s,the Federal Discount Rate has generally exceeded the Prime Interest Rate by a few percentage points.

The Truth in Lending Act:

The least used monetary policy instrument used by the Fed is

The Federal Open Market Committee directs open market operations by buying and selling government securities which are the primary instruments of exercising monetary policy.

The chairman of the Federal Reserve System:

The National Banking Acts of 1863 and 1864 were:

Which of the following statements is true when describing Federal Reserve Banks?

Eligible paper that the borrowing institution can sell to the Reserve Bank includes:

Empirical evidence shows that in countries where central banks are relatively independent from their governments,there has been higher inflation and lower economic growth rates than in countries where central banks are closely tied to their governments.

The ___________________ conducts monetary policy for the twelve European countries that formed the European Monetary Union and adopted the euro as their common currency at the beginning of 1999.

The Fed shares its depository examining functions with:

Three essential needs of a well-operating financial system include all of the following EXCEPT:

A central bank serves the nation:

Which monetary policy tool does the Fed use most infrequently?

The basic policy instruments that the Fed uses to execute monetary policy include all of the following EXCEPT

Total deposits can be contracted by holding the amount of reserves constant but raising the reserve requirement.

The Federal Open Market Committee:

In response to the 2007 - 2009 financial crisis,the Fed's prime credit rate,which was 6.25 percent at the end of 2006,was lowered to _____ percent by the end of 2008 and was maintained at that level through 2009.

The Federal Open Market Committee:

The Federal Open Market committee:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters