Question 1

Debt management includes all of the following except:

Accepted Answer

A) the types of securities to sell 
B) the interest rate patterns to use 
C) the types of refunding to carry out 
D) all of the above 
A) the types of securities to sell 
B) the interest rate patterns to use 
C) the types of refunding to carry out 
D) all of the above

Question 2

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

Accepted Answer

A) True 
 B)False

Question 3

Who made the following famous statement: "The government's view of the economy could be summed up in a few short phrases: If it moves,tax it.If it keeps moving,regulate it.And if it stops moving,subsidize it."

Accepted Answer

A) Alan Greenspan 
B) Ronald Reagan 
C) Jimmy Carter 
D) George Herbert Walker Bush 
E) none of the above 
A) Alan Greenspan 
B) Ronald Reagan 
C) Jimmy Carter 
D) George Herbert Walker Bush 
E) none of the above

Question 4

The basic function served by requiring adequate bank reserves in the monetary system is to:

Accepted Answer

A) assure bank liquidity 
B) provide the basis for the regulation of credit expansion and contraction 
C) maintain adequate capital for investors 
D) impose a burden of risk on bank stockholders 
E)  none of the above 
A) assure bank liquidity 
B) provide the basis for the regulation of credit expansion and contraction 
C) maintain adequate capital for investors 
D) impose a burden of risk on bank stockholders 
E)  none of the above

Question 5

Although the Treasury has vast power to affect the supply of money and credit,the Treasury largely limits its actions to taxing,borrowing,paying bills,and refunding maturing obligations.

Accepted Answer

A) True 
 B)False

Question 6

Continuing federal programs that stabilize economic activity are called

Accepted Answer

A) transfer payments 
B) leveling programs 
C) social insurance programs 
D) socialist spending 
E) none of the above 
A) transfer payments 
B) leveling programs 
C) social insurance programs 
D) socialist spending 
E) none of the above

Question 7

Federal Reserve open market operations,setting reserve requirement,and lending to depositories are:

Accepted Answer

A) usually conducted simultaneously 
B) all designed to have their effect by influencing the reserves of depository institutions 
C) of equal importance in their effort 
D) functions shared with the U.S.Treasury 
A) usually conducted simultaneously 
B) all designed to have their effect by influencing the reserves of depository institutions 
C) of equal importance in their effort 
D) functions shared with the U.S.Treasury

Question 8

In fall 2008,the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

Accepted Answer

A) Economic Stimulus Act 
B) Economic Recovery Act 
C) Economic Stabilization Act 
D) Economic Booster Act 
E) none of the above 
A) Economic Stimulus Act 
B) Economic Recovery Act 
C) Economic Stabilization Act 
D) Economic Booster Act 
E) none of the above

Question 9

When a customer demands additional currency and cashes a check for $500,all of the following occur except:

Accepted Answer

A) the deposits of the bank are reduced $500 
B) required reserves are reduced 
C) Federal Reserves notes decrease 
D) additional reserves must be acquired if the bank has no excess reserves 
A) the deposits of the bank are reduced $500 
B) required reserves are reduced 
C) Federal Reserves notes decrease 
D) additional reserves must be acquired if the bank has no excess reserves

Question 10

Open market operations differ from discounting operations in that they are:

Accepted Answer

A) initiated by member depository institutions 
B) designed to be of significance only to large city banks 
C) initiated by the Federal Reserve 
D) initiated by the U.S.Treasury 
A) initiated by member depository institutions 
B) designed to be of significance only to large city banks 
C) initiated by the Federal Reserve 
D) initiated by the U.S.Treasury

Question 11

During the 2007 - 2009 financial crisis,___________ and __________,who were major participants in the secondary mortgage markets,were on the verge of financial insolvency and possible collapse in mid-2008.

Accepted Answer

A) Fannie Mae and Freddie Mac 
B) the Federal Treasury and the Federal Reserve 
C) Morgan Stanley and Smith Barney 
D) Washington Mutual and Lehman Brothers 
E) none of the above 
A) Fannie Mae and Freddie Mac 
B) the Federal Treasury and the Federal Reserve 
C) Morgan Stanley and Smith Barney 
D) Washington Mutual and Lehman Brothers 
E) none of the above

Question 12

Price inflation:

Accepted Answer

A) is relatively unimportant to individuals 
B) is considered to be acceptable in the nation's quest for high levels of employment 
C) levels the playing field and encourages investment by reducing the uncertainty about future returns 
D) is almost always due to financing wars 
E) none of the above 
A) is relatively unimportant to individuals 
B) is considered to be acceptable in the nation's quest for high levels of employment 
C) levels the playing field and encourages investment by reducing the uncertainty about future returns 
D) is almost always due to financing wars 
E) none of the above

Question 13

The U.S.Treasury has little power to influence money markets.

Accepted Answer

A) True 
 B)False

Question 14

A country's economic policy actions are directed toward all of the following goals EXCEPT:

Accepted Answer

A) balance in the federal budget 
B) high employment 
C) price stability 
D) all of the above are primary policy goals 
A) balance in the federal budget 
B) high employment 
C) price stability 
D) all of the above are primary policy goals

Question 15

During the 2007 - 2009 financial crisis,some of the very largest financial institutions were deemed as being "too big to fail" because their failure would cause cascading negative repercussions throughout the U.S.and many foreign economies.As a result,the Federal Reserve

Accepted Answer

A) moved to reduce liquidity in the monetary system and increased its target federal funds rate to above .25 percent. 
B) worked with the U.S.Treasury to help facilitate the separation of financially weak institutions with institutions that were financially stronger. 
C) both a and b are true 
D) none of the above are true 
A) moved to reduce liquidity in the monetary system and increased its target federal funds rate to above .25 percent. 
B) worked with the U.S.Treasury to help facilitate the separation of financially weak institutions with institutions that were financially stronger. 
C) both a and b are true 
D) none of the above are true

Question 16

During the 2007 - 2009 financial crisis,many major financial institutions and business corporations were on the verge of collapse or failure;however,some of the very largest corporations and financial institutions were deemed as being ________ because their failure would cause cascading negative repercussions throughout the U.S.and many foreign economies.

Accepted Answer

A) toxic firms 
B) boat rockers. 
C) too large to ignore 
D) too big to fail 
E) none of the above 
A) toxic firms 
B) boat rockers. 
C) too large to ignore 
D) too big to fail 
E) none of the above

Question 17

A budget deficit stimulates economic activity.

Accepted Answer

A) True 
 B)False

Question 18

The multiplying capacity of primary deposits is reduced if:

Accepted Answer

A) no additional cash is withdrawn for hand-to-hand circulation 
B) businesses increase their petty cash funds in U.S.banks 
C) foreign countries deposit funds in U.S.banks 
D) the U.S.Treasury deposits funds 
A) no additional cash is withdrawn for hand-to-hand circulation 
B) businesses increase their petty cash funds in U.S.banks 
C) foreign countries deposit funds in U.S.banks 
D) the U.S.Treasury deposits funds

Question 19

The branch of government primarily responsible for the formulation of fiscal policy is the U.S.Senate.

Accepted Answer

A) True 
 B)False

Question 20

Banking system reserves plus currency held by the nonbank public is referred to as the:

Accepted Answer

A) money supply 
B) monetary base 
C) monetary multiplier 
D) monetary requirement 
A) money supply 
B) monetary base 
C) monetary multiplier 
D) monetary requirement

Debt management includes all of the following except:

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

Who made the following famous statement: "The government's view of the economy could be summed up in a few short phrases: If it moves,tax it.If it keeps moving,regulate it.And if it stops moving,subsidize it."

The basic function served by requiring adequate bank reserves in the monetary system is to:

Although the Treasury has vast power to affect the supply of money and credit,the Treasury largely limits its actions to taxing,borrowing,paying bills,and refunding maturing obligations.

Continuing federal programs that stabilize economic activity are called

Federal Reserve open market operations,setting reserve requirement,and lending to depositories are:

In fall 2008,the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

When a customer demands additional currency and cashes a check for $500,all of the following occur except:

Open market operations differ from discounting operations in that they are:

During the 2007 - 2009 financial crisis,_ and ,who were major participants in the secondary mortgage markets,were on the verge of financial insolvency and possible collapse in mid-2008.

Price inflation:

The U.S.Treasury has little power to influence money markets.

A country's economic policy actions are directed toward all of the following goals EXCEPT:

During the 2007 - 2009 financial crisis,some of the very largest financial institutions were deemed as being "too big to fail" because their failure would cause cascading negative repercussions throughout the U.S.and many foreign economies.As a result,the Federal Reserve

A budget deficit stimulates economic activity.

The multiplying capacity of primary deposits is reduced if:

The branch of government primarily responsible for the formulation of fiscal policy is the U.S.Senate.

Banking system reserves plus currency held by the nonbank public is referred to as the:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

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 5: Policy Makers and the Money Supply

Debt management includes all of the following except:

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

Who made the following famous statement: "The government's view of the economy could be summed up in a few short phrases: If it moves,tax it.If it keeps moving,regulate it.And if it stops moving,subsidize it."

The basic function served by requiring adequate bank reserves in the monetary system is to:

Although the Treasury has vast power to affect the supply of money and credit,the Treasury largely limits its actions to taxing,borrowing,paying bills,and refunding maturing obligations.

Continuing federal programs that stabilize economic activity are called

Federal Reserve open market operations,setting reserve requirement,and lending to depositories are:

In fall 2008,the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

When a customer demands additional currency and cashes a check for $500,all of the following occur except:

Open market operations differ from discounting operations in that they are:

During the 2007 - 2009 financial crisis,___________ and __________,who were major participants in the secondary mortgage markets,were on the verge of financial insolvency and possible collapse in mid-2008.

Price inflation:

The U.S.Treasury has little power to influence money markets.

A country's economic policy actions are directed toward all of the following goals EXCEPT:

During the 2007 - 2009 financial crisis,some of the very largest financial institutions were deemed as being "too big to fail" because their failure would cause cascading negative repercussions throughout the U.S.and many foreign economies.As a result,the Federal Reserve

A budget deficit stimulates economic activity.

The multiplying capacity of primary deposits is reduced if:

The branch of government primarily responsible for the formulation of fiscal policy is the U.S.Senate.

Banking system reserves plus currency held by the nonbank public is referred to as the:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

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

During the 2007 - 2009 financial crisis,_ and ,who were major participants in the secondary mortgage markets,were on the verge of financial insolvency and possible collapse in mid-2008.