Question 1

The discount rate is:

Accepted Answer

A) the rate charged a bank's best customers 
B) the rate paid by large business with good credit 
C) the rate a bank must pay to borrow from the Fed 
D) none of the above 
A) the rate charged a bank's best customers 
B) the rate paid by large business with good credit 
C) the rate a bank must pay to borrow from the Fed 
D) none of the above

Question 2

Each Federal Reserve Bank has a president and first vice-president who are appointed by:

Accepted Answer

A) the Board of Governors 
B) the President of the United States 
C) the President of the United States with the advice and consent of the Senate 
D) its board of directors 
A) the Board of Governors 
B) the President of the United States 
C) the President of the United States with the advice and consent of the Senate 
D) its board of directors

Question 3

If excess reserves are near zero,then a reduction of reserves will cause the system to loosen credit.

Accepted Answer

A) True 
 B)False

Question 4

The Reserve Banks are private institutions owned by many member banks of the Fed.

Accepted Answer

A) True 
 B)False

Question 5

The closer to the required minimum the banking system maintains its reserves,the tighter the control the Fed has over the money creation process through its other instruments.

Accepted Answer

A) True 
 B)False

Question 6

Open market operations involve the buying and selling of U.S.government securities.

Accepted Answer

A) True 
 B)False

Question 7

The Federal Reserve act required that ALL national banks were to become members of the Fed.

Accepted Answer

A) True 
 B)False

Question 8

A major weakness of the banking system under the National Banking Acts was that the money supply could not be easily expanded or contracted to meet changing seasonal needs and/or changes in economic activity.

Accepted Answer

A) True 
 B)False

Question 9

One significant feature of DIDMCA was that it:

Accepted Answer

A) expanded the ability of the Fed to influence unemployment rates 
B) expanded Fed control over the reserve requirements of non-member banks 
C) created the FDIC 
D) none of the above 
A) expanded the ability of the Fed to influence unemployment rates 
B) expanded Fed control over the reserve requirements of non-member banks 
C) created the FDIC 
D) none of the above

Question 10

A central bank is a federal government agency that facilitates the operation of the financial system and regulates money supply growth.

Accepted Answer

A) True 
 B)False

Question 11

The Federal Reserve Banks now hold reserves for:

Accepted Answer

A) branches of foreign banks 
B) only commercial banks,savings and loan associations,and credit unions 
C) all of the reserve requirements of member banks 
D) all of the reserve requirements of all depository institutions 
A) branches of foreign banks 
B) only commercial banks,savings and loan associations,and credit unions 
C) all of the reserve requirements of member banks 
D) all of the reserve requirements of all depository institutions

Question 12

One of the major weaknesses of the banking system before the Federal Reserve System was set up was:

Accepted Answer

A) the arrangement for holding reserves 
B) the lack of a deposit insurance system 
C) a lack of currency and coin 
D) an inadequate supply of government bonds 
A) the arrangement for holding reserves 
B) the lack of a deposit insurance system 
C) a lack of currency and coin 
D) an inadequate supply of government bonds

Question 13

Each member of the Fed Board of Governors is appointed for a term of:

Accepted Answer

A) 8 years 
B) 12 years 
C) 14 years 
D) none of the above 
A) 8 years 
B) 12 years 
C) 14 years 
D) none of the above

Question 14

The accommodative activities of the Federal Reserve System are:

Accepted Answer

A) clearing checks 
B) meeting the credit needs of individuals and institutions 
C) supporting depository institutions 
D) all of the above 
A) clearing checks 
B) meeting the credit needs of individuals and institutions 
C) supporting depository institutions 
D) all of the above

Question 15

Before the Federal Reserve System was created,a large part of the reserves of commercial banks was:

Accepted Answer

A) in the form of state and federal government bonds 
B) deposited with the United States Treasury 
C) held as deposits with large city banks 
D) held as cash in their vaults 
A) in the form of state and federal government bonds 
B) deposited with the United States Treasury 
C) held as deposits with large city banks 
D) held as cash in their vaults

Question 16

For which of the following are member banks prohibited from borrowing at the Fed's discount window?

Accepted Answer

A) funds to meet reserve requirements 
B) funds to meet depositor withdrawal demands 
C) to meet business loan demands 
D) all the above are permitted 
E) none of the above are permitted 
A) funds to meet reserve requirements 
B) funds to meet depositor withdrawal demands 
C) to meet business loan demands 
D) all the above are permitted 
E) none of the above are permitted

Question 17

Currently,the Chairman of the Federal Reserve is ________________________.

Accepted Answer

A) Paul Volker 
B) Alan Greenspan 
C) Ben Bernanke 
D) None of the above 
A) Paul Volker 
B) Alan Greenspan 
C) Ben Bernanke 
D) None of the above

Question 18

The __________________,passed in 1968,requires the clear explanation of consumer credit costs and garnishment procedures (taking wages or property by legal means)and prohibits overly high-priced credit transactions.

Accepted Answer

A) Consumer Credit Expansion Act 
B) Credit Growth Act 
C) Consumer Credit Protection Act 
D) Consumer Safety Act 
E) none of the above 
A) Consumer Credit Expansion Act 
B) Credit Growth Act 
C) Consumer Credit Protection Act 
D) Consumer Safety Act 
E) none of the above

Question 19

Under the authority of the Federal Reserve Act of 1913:

Accepted Answer

A) member banks were required to purchase capital stock in the Federal Reserve Banks of their district 
B) member banks may not borrow from the Fed 
C) a formal open-market committee arrangement was established 
D) national banks were permitted to become members of the Fed if they could show evidence of satisfactory financial condition 
A) member banks were required to purchase capital stock in the Federal Reserve Banks of their district 
B) member banks may not borrow from the Fed 
C) a formal open-market committee arrangement was established 
D) national banks were permitted to become members of the Fed if they could show evidence of satisfactory financial condition

Question 20

Today the responsibilities of the Fed may be described as:

Accepted Answer

A) those relating to monetary policy,to supervision and regulation,and to services provided for depository institutions and the government. 
B) those relating to fiscal policy,to supervision and regulation,and to services provided for depository institutions and the government. 
C) those relating to monetary policy,to deregulation,and to services provided for depository institutions and the government. 
D) those relating to monetary policy,to supervision and regulation,and to services provided for homeowners and the government. 
E) none of the above 
A) those relating to monetary policy,to supervision and regulation,and to services provided for depository institutions and the government. 
B) those relating to fiscal policy,to supervision and regulation,and to services provided for depository institutions and the government. 
C) those relating to monetary policy,to deregulation,and to services provided for depository institutions and the government. 
D) those relating to monetary policy,to supervision and regulation,and to services provided for homeowners and the government. 
E) none of the above

The discount rate is:

Each Federal Reserve Bank has a president and first vice-president who are appointed by:

If excess reserves are near zero,then a reduction of reserves will cause the system to loosen credit.

The Reserve Banks are private institutions owned by many member banks of the Fed.

The closer to the required minimum the banking system maintains its reserves,the tighter the control the Fed has over the money creation process through its other instruments.

Open market operations involve the buying and selling of U.S.government securities.

The Federal Reserve act required that ALL national banks were to become members of the Fed.

A major weakness of the banking system under the National Banking Acts was that the money supply could not be easily expanded or contracted to meet changing seasonal needs and/or changes in economic activity.

One significant feature of DIDMCA was that it:

A central bank is a federal government agency that facilitates the operation of the financial system and regulates money supply growth.

The Federal Reserve Banks now hold reserves for:

One of the major weaknesses of the banking system before the Federal Reserve System was set up was:

Each member of the Fed Board of Governors is appointed for a term of:

The accommodative activities of the Federal Reserve System are:

Before the Federal Reserve System was created,a large part of the reserves of commercial banks was:

For which of the following are member banks prohibited from borrowing at the Fed's discount window?

Currently,the Chairman of the Federal Reserve is ________________________.

The __________________,passed in 1968,requires the clear explanation of consumer credit costs and garnishment procedures (taking wages or property by legal means)and prohibits overly high-priced credit transactions.

Under the authority of the Federal Reserve Act of 1913:

Today the responsibilities of the Fed may be described as:

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

The discount rate is:

Each Federal Reserve Bank has a president and first vice-president who are appointed by:

If excess reserves are near zero,then a reduction of reserves will cause the system to loosen credit.

The Reserve Banks are private institutions owned by many member banks of the Fed.

The closer to the required minimum the banking system maintains its reserves,the tighter the control the Fed has over the money creation process through its other instruments.

Open market operations involve the buying and selling of U.S.government securities.

The Federal Reserve act required that ALL national banks were to become members of the Fed.

A major weakness of the banking system under the National Banking Acts was that the money supply could not be easily expanded or contracted to meet changing seasonal needs and/or changes in economic activity.

One significant feature of DIDMCA was that it:

A central bank is a federal government agency that facilitates the operation of the financial system and regulates money supply growth.

The Federal Reserve Banks now hold reserves for:

One of the major weaknesses of the banking system before the Federal Reserve System was set up was:

Each member of the Fed Board of Governors is appointed for a term of:

The accommodative activities of the Federal Reserve System are:

Before the Federal Reserve System was created,a large part of the reserves of commercial banks was:

For which of the following are member banks prohibited from borrowing at the Fed's discount window?

Currently,the Chairman of the Federal Reserve is ________________________.

The __________________,passed in 1968,requires the clear explanation of consumer credit costs and garnishment procedures (taking wages or property by legal means)and prohibits overly high-priced credit transactions.

Under the authority of the Federal Reserve Act of 1913:

Today the responsibilities of the Fed may be described as:

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