Question 1

The interest rate that a bank must pay to borrow from its regional federal reserve bank is called

Accepted Answer

A) the National Discount Rate 
B) the Prime Rate 
C) the Federal Discount Rate 
D) none of the above 
A) the National Discount Rate 
B) the Prime Rate 
C) the Federal Discount Rate 
D) none of the above

Question 2

Federal Reserve actions that offset unexpected monetary developments and contribute to the smooth everyday functioning of the economy are called

Accepted Answer

A) defensive actions 
B) dynamic actions 
C) accommodative actions 
D) none of the above 
A) defensive actions 
B) dynamic actions 
C) accommodative actions 
D) none of the above

Question 3

Today the responsibilities of the Fed may be described as:

Accepted Answer

A) those relating to monetary and fiscal 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 and fiscal 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

Question 4

The Federal Reserve System consists of all of the following components EXCEPT:

Accepted Answer

A) Monetary Policy Committee 
B) Board of Governors 
C) Federal Open Market Committee 
D) all of the above 
A) Monetary Policy Committee 
B) Board of Governors 
C) Federal Open Market Committee 
D) all of the above

Question 5

The Board of Governors of the Federal Reserve establishes monetary policy by:

Accepted Answer

A) setting reserve requirements,altering the prime rate,and through federal open market operations. 
B) setting reserve requirements,altering the discount rate,and through federal open market operations. 
C) setting reserve requirements,altering the discount rate,and through international currency transactions. 
D) setting bank profitability ratios,altering the discount rate,and through federal open market operations. 
E) none of the above 
A) setting reserve requirements,altering the prime rate,and through federal open market operations. 
B) setting reserve requirements,altering the discount rate,and through federal open market operations. 
C) setting reserve requirements,altering the discount rate,and through international currency transactions. 
D) setting bank profitability ratios,altering the discount rate,and through federal open market operations. 
E) none of the above

Question 6

The essential requirements of a well-functioning financial system include an efficient national payments system,a flexible money supply,and a lending/borrowing mechanism to help alleviate liquidity problems when they arise.

Accepted Answer

A) True 
 B)False

Question 7

Although not provided for in the original organization of the Fed,open market operations have become the most important and effective means of monetary control.

Accepted Answer

A) True 
 B)False

Question 8

The Federal Reserve Act of 1913 provided that all national and state-chartered banks were to become members of the Fed.

Accepted Answer

A) True 
 B)False

Question 9

Paul Volcker was chairman of the Fed prior to the appointment of Alan Greenspan.

Accepted Answer

A) True 
 B)False

Question 10

A (n)____________________ is necessary for the monetary system to carry out the financial function of transferring money,which in turn is a requirement for an effective financial system.

Accepted Answer

A) internet banking system 
B) electronic data transfer system 
C) wire transfer system 
D) efficient payments mechanism 
E) none of the above 
A) internet banking system 
B) electronic data transfer system 
C) wire transfer system 
D) efficient payments mechanism 
E) none of the above

Question 11

The Board of Governors of the Federal Reserve System:

Accepted Answer

A) consists of 7 appointed members 
B) sets reserve requirements 
C) approves discount rates as part of monetary policy 
D) all the above 
E) none of the above 
A) consists of 7 appointed members 
B) sets reserve requirements 
C) approves discount rates as part of monetary policy 
D) all the above 
E) none of the above

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The Fed Board of Governors is composed of seven members who are appointed for a term of 12 years.

Accepted Answer

A) True 
 B)False

Question 14

The central bank in the United Kingdom is the:

Accepted Answer

A) Bank of Britain 
B) British Fed 
C) British Bank 
D) Bank of England 
E) none of the above 
A) Bank of Britain 
B) British Fed 
C) British Bank 
D) Bank of England 
E) none of the above

Question 15

____________________________ prohibits discrimination in the granting of credit on the basis of sex,marital status,race,color,religion,national origin,age,or receipt of public assistance.

Accepted Answer

A) Truth in Lending Act 
B) Equal Credit Opportunity Act 
C) Federal Trade Commission Improvement Act 
D) Fair Credit Billing Act 
A) Truth in Lending Act 
B) Equal Credit Opportunity Act 
C) Federal Trade Commission Improvement Act 
D) Fair Credit Billing Act

Question 16

Although it enjoys substantial independence in its operations,the appointive power of the president and the ability of Congress to alter its structure make the ______________ a dependent political structure and one of the most powerful monetary organizations in the world.

Accepted Answer

A) Board of Governors (BOG) 
B) Board of Directors (BO
D)  
C) Governing Body (GO
B)  
D) Financial Governors (FOG) 
E) none of the above 
A) Board of Governors (BOG) 
B) Board of Directors (BO
D)  
C) Governing Body (GO
B)  
D) Financial Governors (FOG) 
E) none of the above

Question 17

Bank holding companies are supervised and examined by:

Accepted Answer

A) the Comptroller of the Currency 
B) the FDIC 
C) the Federal Reserve 
D) internal auditors only 
A) the Comptroller of the Currency 
B) the FDIC 
C) the Federal Reserve 
D) internal auditors only

Question 18

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

Question 19

Member banks of the Federal Reserve System:

Accepted Answer

A) must maintain all reserves with their Federal Reserve Bank 
B) may include deposits held at large city banks as legal reserves 
C) maintain levels of reserves based on the size of the city in which they are located 
D) are permitted to count vault cash as part of their reserves 
A) must maintain all reserves with their Federal Reserve Bank 
B) may include deposits held at large city banks as legal reserves 
C) maintain levels of reserves based on the size of the city in which they are located 
D) are permitted to count vault cash as part of their reserves

Question 20

Banks are required by the Fed to hold reserves equal to a part of their deposits as part of the fractional reserve system of the U.S.banking system.

Accepted Answer

A) True 
 B)False

The interest rate that a bank must pay to borrow from its regional federal reserve bank is called

Federal Reserve actions that offset unexpected monetary developments and contribute to the smooth everyday functioning of the economy are called

Today the responsibilities of the Fed may be described as:

The Federal Reserve System consists of all of the following components EXCEPT:

The Board of Governors of the Federal Reserve establishes monetary policy by:

The essential requirements of a well-functioning financial system include an efficient national payments system,a flexible money supply,and a lending/borrowing mechanism to help alleviate liquidity problems when they arise.

Although not provided for in the original organization of the Fed,open market operations have become the most important and effective means of monetary control.

The Federal Reserve Act of 1913 provided that all national and state-chartered banks were to become members of the Fed.

Paul Volcker was chairman of the Fed prior to the appointment of Alan Greenspan.

A (n)____________________ is necessary for the monetary system to carry out the financial function of transferring money,which in turn is a requirement for an effective financial system.

The Board of Governors of the Federal Reserve System:

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

The Fed Board of Governors is composed of seven members who are appointed for a term of 12 years.

The central bank in the United Kingdom is the:

____________________________ prohibits discrimination in the granting of credit on the basis of sex,marital status,race,color,religion,national origin,age,or receipt of public assistance.

Although it enjoys substantial independence in its operations,the appointive power of the president and the ability of Congress to alter its structure make the ______________ a dependent political structure and one of the most powerful monetary organizations in the world.

Bank holding companies are supervised and examined by:

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

Member banks of the Federal Reserve System:

Banks are required by the Fed to hold reserves equal to a part of their deposits as part of the fractional reserve system of the U.S.banking system.

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 interest rate that a bank must pay to borrow from its regional federal reserve bank is called

Federal Reserve actions that offset unexpected monetary developments and contribute to the smooth everyday functioning of the economy are called

Today the responsibilities of the Fed may be described as:

The Federal Reserve System consists of all of the following components EXCEPT:

The Board of Governors of the Federal Reserve establishes monetary policy by:

The essential requirements of a well-functioning financial system include an efficient national payments system,a flexible money supply,and a lending/borrowing mechanism to help alleviate liquidity problems when they arise.

Although not provided for in the original organization of the Fed,open market operations have become the most important and effective means of monetary control.

The Federal Reserve Act of 1913 provided that all national and state-chartered banks were to become members of the Fed.

Paul Volcker was chairman of the Fed prior to the appointment of Alan Greenspan.

A (n)____________________ is necessary for the monetary system to carry out the financial function of transferring money,which in turn is a requirement for an effective financial system.

The Board of Governors of the Federal Reserve System:

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

The Fed Board of Governors is composed of seven members who are appointed for a term of 12 years.

The central bank in the United Kingdom is the:

____________________________ prohibits discrimination in the granting of credit on the basis of sex,marital status,race,color,religion,national origin,age,or receipt of public assistance.

Although it enjoys substantial independence in its operations,the appointive power of the president and the ability of Congress to alter its structure make the ______________ a dependent political structure and one of the most powerful monetary organizations in the world.

Bank holding companies are supervised and examined by:

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

Member banks of the Federal Reserve System:

Banks are required by the Fed to hold reserves equal to a part of their deposits as part of the fractional reserve system of the U.S.banking system.

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