Question 1

In addition to the 12 Reserve Banks,25 branch banks have been established.

Accepted Answer

A) True 
 B)False

Question 2

The banking system of the United States is a ___________ reserve system because banks are required by the Fed to hold reserves equal to a specified percentage of their deposits.

Accepted Answer

A) required 
B) fractional 
C) proportional 
D) multiplicative 
E) none of the above 
A) required 
B) fractional 
C) proportional 
D) multiplicative 
E) none of the above

Question 3

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called dynamic actions.

Accepted Answer

A) True 
 B)False

Question 4

The United States was one of the earliest major-industrial nations to adopt a permanent system of central banking.

Accepted Answer

A) True 
 B)False

Question 5

Regulation Z requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

Accepted Answer

A) True 
 B)False

Question 6

The two routes of check clearance include the _____________ settlement,in which the transaction takes place entirely within a single Federal Reserve district,and the _____________ settlement,in which there are relationships between banks of two Federal Reserve districts.

Accepted Answer

A) interdistrict,intradistrict 
B) intradistrict,interdistrict 
C) Fed wire,District wire 
D) District wire,Fed wire 
E) none of the above 
A) interdistrict,intradistrict 
B) intradistrict,interdistrict 
C) Fed wire,District wire 
D) District wire,Fed wire 
E) none of the above

Question 7

The Fed lending rate to depository institutions was consistently lower than the bank prime lending rate during the 1977-1994 period.

Accepted Answer

A) True 
 B)False

Question 8

The seven-member board of the Federal Reserve that sets monetary policy is called

Accepted Answer

A) the Federal Reserve Open Market Committee 
B) the Federal Reserve Board of Governors 
C) the Federal Reserve Advisory Committee 
D) none of the above 
A) the Federal Reserve Open Market Committee 
B) the Federal Reserve Board of Governors 
C) the Federal Reserve Advisory Committee 
D) none of the above

Question 9

The United States created its system of central banking:

Accepted Answer

A) earlier than such banks were established in other industrial nations 
B) later than such banks were established in other industrial nations 
C) to facilitate branch banking 
D) to facilitate international exchange operations 
A) earlier than such banks were established in other industrial nations 
B) later than such banks were established in other industrial nations 
C) to facilitate branch banking 
D) to facilitate international exchange operations

Question 10

History generally supports the contention that under the guidance of Paul Volcker,a (n)____________ Fed policy brought down the double-digit inflation of the 1970s and the early 1980s,and the Federal Open Market Committee consistently responded to his leadership.

Accepted Answer

A) loosening of 
B) restrictive 
C) expansionary 
D) two of the above 
E) none of the above 
A) loosening of 
B) restrictive 
C) expansionary 
D) two of the above 
E) none of the above

Question 11

The five components of the Federal Reserve System include:

Accepted Answer

A) Member banks,Federal Reserve District Banks,Board of Governors,Federal Open Market Committee,Adlib Committees. 
B) Nonmember banks,Federal Reserve District Banks,Board of Governors,Federal Open Market Committee,Advisory committees. 
C) Member banks,Federal Reserve District Banks,Board of Presidents,Federal Open Market Committee,Advisory committees. 
D) Member banks,Federal Reserve District Banks,Board of Governors,Federal Closed Market Committee,Advisory committees. 
E) none of the above 
A) Member banks,Federal Reserve District Banks,Board of Governors,Federal Open Market Committee,Adlib Committees. 
B) Nonmember banks,Federal Reserve District Banks,Board of Governors,Federal Open Market Committee,Advisory committees. 
C) Member banks,Federal Reserve District Banks,Board of Presidents,Federal Open Market Committee,Advisory committees. 
D) Member banks,Federal Reserve District Banks,Board of Governors,Federal Closed Market Committee,Advisory committees. 
E) none of the above

Question 12

The primary function of the Federal Reserve System is to:

Accepted Answer

A) issue currency to member banks 
B) regulate the growth of the money supply 
C) serve as a fiscal agent for the U.S.government 
D) regulate and conduct bank examinations 
A) issue currency to member banks 
B) regulate the growth of the money supply 
C) serve as a fiscal agent for the U.S.government 
D) regulate and conduct bank examinations

Question 13

The National Banking Act provided that:

Accepted Answer

A) national banks could issue their own notes only against U.S.government bonds the banks held on deposit with the Treasury 
B) national banks could issue their own notes only against cash held in their vaults 
C) national banks could issue their own notes only against U.S.government bonds the banks held on deposit with the Federal Reserve Bank 
D) none of the above 
A) national banks could issue their own notes only against U.S.government bonds the banks held on deposit with the Treasury 
B) national banks could issue their own notes only against cash held in their vaults 
C) national banks could issue their own notes only against U.S.government bonds the banks held on deposit with the Federal Reserve Bank 
D) none of the above

Question 14

The Federal Reserve is empowered to encourage depository institutions to help meet the needs of communities for housing and other purposes:

Accepted Answer

A) through the Community Reinvestment Act 
B) through the Truth in Lending Act 
C) by a provision of the Fair Housing Act 
D) by strictly enforcing usury laws setting maximum interest rates 
A) through the Community Reinvestment Act 
B) through the Truth in Lending Act 
C) by a provision of the Fair Housing Act 
D) by strictly enforcing usury laws setting maximum interest rates

Question 15

During the past several years:

Accepted Answer

A) the discount rate has been lower than the prime rate 
B) the discount rate has been higher than the prime rate 
C) the discount rate has been unrelated to the prime rate 
D) none of the above 
A) the discount rate has been lower than the prime rate 
B) the discount rate has been higher than the prime rate 
C) the discount rate has been unrelated to the prime rate 
D) none of the above

Question 16

The Fed prefers to change reserve requirements rather than to use open market operations.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The Federal Reserve Advisory Council provides advice and general information to the Secretary of the Treasury.

Accepted Answer

A) True 
 B)False

Question 19

Open market operations:

Accepted Answer

A) are used infrequently 
B) are a prime source of income for the U.S.economy 
C) are used by the Fed to alter bank reserves 
D) none of the above 
A) are used infrequently 
B) are a prime source of income for the U.S.economy 
C) are used by the Fed to alter bank reserves 
D) none of the above

Question 20

Under the Federal Reserve Act of 1913,the number of Federal Reserve districts established is:

Accepted Answer

A) 8 
B) 10 
C) 12 
D) 25 
A) 8 
B) 10 
C) 12 
D) 25

In addition to the 12 Reserve Banks,25 branch banks have been established.

The banking system of the United States is a ___________ reserve system because banks are required by the Fed to hold reserves equal to a specified percentage of their deposits.

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called dynamic actions.

The United States was one of the earliest major-industrial nations to adopt a permanent system of central banking.

Regulation Z requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

The two routes of check clearance include the _ settlement,in which the transaction takes place entirely within a single Federal Reserve district,and the _ settlement,in which there are relationships between banks of two Federal Reserve districts.

The Fed lending rate to depository institutions was consistently lower than the bank prime lending rate during the 1977-1994 period.

The seven-member board of the Federal Reserve that sets monetary policy is called

The United States created its system of central banking:

History generally supports the contention that under the guidance of Paul Volcker,a (n)____________ Fed policy brought down the double-digit inflation of the 1970s and the early 1980s,and the Federal Open Market Committee consistently responded to his leadership.

The five components of the Federal Reserve System include:

The primary function of the Federal Reserve System is to:

The National Banking Act provided that:

The Federal Reserve is empowered to encourage depository institutions to help meet the needs of communities for housing and other purposes:

During the past several years:

The Fed prefers to change reserve requirements rather than to use open market operations.

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

The Federal Reserve Advisory Council provides advice and general information to the Secretary of the Treasury.

Open market operations:

Under the Federal Reserve Act of 1913,the number of Federal Reserve districts established is:

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

In addition to the 12 Reserve Banks,25 branch banks have been established.

The banking system of the United States is a ___________ reserve system because banks are required by the Fed to hold reserves equal to a specified percentage of their deposits.

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called dynamic actions.

The United States was one of the earliest major-industrial nations to adopt a permanent system of central banking.

Regulation Z requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

The two routes of check clearance include the _____________ settlement,in which the transaction takes place entirely within a single Federal Reserve district,and the _____________ settlement,in which there are relationships between banks of two Federal Reserve districts.

The Fed lending rate to depository institutions was consistently lower than the bank prime lending rate during the 1977-1994 period.

The seven-member board of the Federal Reserve that sets monetary policy is called

The United States created its system of central banking:

History generally supports the contention that under the guidance of Paul Volcker,a (n)____________ Fed policy brought down the double-digit inflation of the 1970s and the early 1980s,and the Federal Open Market Committee consistently responded to his leadership.

The five components of the Federal Reserve System include:

The primary function of the Federal Reserve System is to:

The National Banking Act provided that:

The Federal Reserve is empowered to encourage depository institutions to help meet the needs of communities for housing and other purposes:

During the past several years:

The Fed prefers to change reserve requirements rather than to use open market operations.

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

The Federal Reserve Advisory Council provides advice and general information to the Secretary of the Treasury.

Open market operations:

Under the Federal Reserve Act of 1913,the number of Federal Reserve districts established is:

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

The two routes of check clearance include the _ settlement,in which the transaction takes place entirely within a single Federal Reserve district,and the _ settlement,in which there are relationships between banks of two Federal Reserve districts.