Question 1

The Federal Reserve System was not able to regulate money and credit until after World War II.

Accepted Answer

A) True 
 B)False

Question 2

The four groups of policy makers that are actively involved in achieving the nation's economic policy objectives are the Federal Reserve System,the President,Congress,and the U.S.Treasury.

Accepted Answer

A) True 
 B)False

Question 3

Transfer payments are income payments for which no current productive service is rendered.

Accepted Answer

A) True 
 B)False

Question 4

Assume that a bank receives a primary deposit of $1,000,and the reserve requirement is 15%.Which of the following would reflect the asset side of the balance sheet after a maximum loan amount has just been made?

Accepted Answer

A) reserves of $1,000 
B) deposits of $1,000 
C) reserves of $1,000 and loans of $150 
D) reserves of $1,000 and loans of $850 
A) reserves of $1,000 
B) deposits of $1,000 
C) reserves of $1,000 and loans of $150 
D) reserves of $1,000 and loans of $850

Question 5

When the United States Treasury makes a payment to an individual or business,it usually takes the form of a:

Accepted Answer

A) check drawn on a Federal Reserve Bank 
B) check drawn directly against the U.S.Treasury 
C) special Treasury voucher 
D) check drawn against a bank in which tax balances are held 
A) check drawn on a Federal Reserve Bank 
B) check drawn directly against the U.S.Treasury 
C) special Treasury voucher 
D) check drawn against a bank in which tax balances are held

Question 6

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

Accepted Answer

A) assure bank liquidity 
B) influence the relative profitability of member banks 
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) influence the relative profitability of member banks 
C) maintain adequate capital for investors 
D) impose a burden of risk on bank stockholders 
E) none of the above

Question 7

Debt management of the federal government includes:

Accepted Answer

A) determining which types of refunding to implement 
B) determining the types of securities to sell 
C) deciding which interest rate patterns to use 
D) two of the above 
E) answers a,b and c are correct 
A) determining which types of refunding to implement 
B) determining the types of securities to sell 
C) deciding which interest rate patterns to use 
D) two of the above 
E) answers a,b and c are correct

Question 8

The Treasury's primary checkable deposit accounts for day-to-day operations are kept at several commercial banks in large cities.

Accepted Answer

A) True 
 B)False

Question 9

Total bank reserves do not include which of the following?

Accepted Answer

A) deficit reserves 
B) excess reserves 
C) required reserves 
D) all the above are included in total bank reserves 
A) deficit reserves 
B) excess reserves 
C) required reserves 
D) all the above are included in total bank reserves

Question 10

Traditionally,the federal government provides services that cannot be provided as efficiently by the private sector.

Accepted Answer

A) True 
 B)False

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) Freddie Mae and Fannie 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) Freddie Mae and Fannie 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

Which one of the following sources provides the least backing (collateral)today for U.S.Federal Reserve notes?

Accepted Answer

A) gold certificates 
B) Special Drawing Rights 
C) eligible paper in the form of business notes and drafts 
D) U.S.government and agency securities 
A) gold certificates 
B) Special Drawing Rights 
C) eligible paper in the form of business notes and drafts 
D) U.S.government and agency securities

Question 13

If the reserve requirement is 25% and $5,000 is injected into the banking system,the maximum expansion in the money supply would be:

Accepted Answer

A) $1,250 
B) $20,000 
C) $6,667 
D) none of the above 
A) $1,250 
B) $20,000 
C) $6,667 
D) none of the above

Question 14

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

Question 15

A primary Treasury objective is to maintain satisfactory conditions in the government securities market through maintaining investor confidence.

Accepted Answer

A) True 
 B)False

Question 16

Under the leadership of ______________,during the 2007-2009 financial crisis,the Treasury was actively involved in trying to help financial institutions on the brink of collapse find help through mergers with financially stronger institutions.

Accepted Answer

A) George Bush 
B) Alan Greenspan 
C) Ben Bernanke 
D) Henry Paulson 
E) none of the above are involved 
A) George Bush 
B) Alan Greenspan 
C) Ben Bernanke 
D) Henry Paulson 
E) none of the above are involved

Question 17

Primary groups of policy makers that are actively involved in achieving a nation's economic policy objectives include all of the following EXCEPT:

Accepted Answer

A) the Federal Reserve System 
B) the President 
C) Congress 
D) all of the above are primary policy makers 
A) the Federal Reserve System 
B) the President 
C) Congress 
D) all of the above are primary policy makers

Question 18

During the 1980s and 1990s,the United States primarily:

Accepted Answer

A) imported more than it exported 
B) exported more than it imported 
C) imported about as much as it exported 
D) none of the above 
A) imported more than it exported 
B) exported more than it imported 
C) imported about as much as it exported 
D) none of the above

Question 19

The President of the United States formulates budgetary and fiscal policy,but Congress must enact legislation to implement these policies.

Accepted Answer

A) True 
 B)False

Question 20

In September,2008 ____________ was acquired by Bank of America and _____________ declared bankruptcy when no viable financial alternatives surfaced.

Accepted Answer

A) Bank of America,Washington Mutual 
B) Merrill Lynch,Lehman Brothers 
C) Citicorp,Smith Barney 
D) Morgan Stanley,Chase 
E) none of the above 
A) Bank of America,Washington Mutual 
B) Merrill Lynch,Lehman Brothers 
C) Citicorp,Smith Barney 
D) Morgan Stanley,Chase 
E) none of the above

The Federal Reserve System was not able to regulate money and credit until after World War II.

The four groups of policy makers that are actively involved in achieving the nation's economic policy objectives are the Federal Reserve System,the President,Congress,and the U.S.Treasury.

Transfer payments are income payments for which no current productive service is rendered.

Assume that a bank receives a primary deposit of $1,000,and the reserve requirement is 15%.Which of the following would reflect the asset side of the balance sheet after a maximum loan amount has just been made?

When the United States Treasury makes a payment to an individual or business,it usually takes the form of a:

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

Debt management of the federal government includes:

The Treasury's primary checkable deposit accounts for day-to-day operations are kept at several commercial banks in large cities.

Total bank reserves do not include which of the following?

Traditionally,the federal government provides services that cannot be provided as efficiently by the private sector.

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.

Which one of the following sources provides the least backing (collateral)today for U.S.Federal Reserve notes?

If the reserve requirement is 25% and $5,000 is injected into the banking system,the maximum expansion in the money supply would be:

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."

A primary Treasury objective is to maintain satisfactory conditions in the government securities market through maintaining investor confidence.

Under the leadership of ______________,during the 2007-2009 financial crisis,the Treasury was actively involved in trying to help financial institutions on the brink of collapse find help through mergers with financially stronger institutions.

Primary groups of policy makers that are actively involved in achieving a nation's economic policy objectives include all of the following EXCEPT:

During the 1980s and 1990s,the United States primarily:

The President of the United States formulates budgetary and fiscal policy,but Congress must enact legislation to implement these policies.

In September,2008 was acquired by Bank of America and _ declared bankruptcy when no viable financial alternatives surfaced.

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

The Federal Reserve System was not able to regulate money and credit until after World War II.

The four groups of policy makers that are actively involved in achieving the nation's economic policy objectives are the Federal Reserve System,the President,Congress,and the U.S.Treasury.

Transfer payments are income payments for which no current productive service is rendered.

Assume that a bank receives a primary deposit of $1,000,and the reserve requirement is 15%.Which of the following would reflect the asset side of the balance sheet after a maximum loan amount has just been made?

When the United States Treasury makes a payment to an individual or business,it usually takes the form of a:

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

Debt management of the federal government includes:

The Treasury's primary checkable deposit accounts for day-to-day operations are kept at several commercial banks in large cities.

Total bank reserves do not include which of the following?

Traditionally,the federal government provides services that cannot be provided as efficiently by the private sector.

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.

Which one of the following sources provides the least backing (collateral)today for U.S.Federal Reserve notes?

If the reserve requirement is 25% and $5,000 is injected into the banking system,the maximum expansion in the money supply would be:

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."

A primary Treasury objective is to maintain satisfactory conditions in the government securities market through maintaining investor confidence.

Under the leadership of ______________,during the 2007-2009 financial crisis,the Treasury was actively involved in trying to help financial institutions on the brink of collapse find help through mergers with financially stronger institutions.

Primary groups of policy makers that are actively involved in achieving a nation's economic policy objectives include all of the following EXCEPT:

During the 1980s and 1990s,the United States primarily:

The President of the United States formulates budgetary and fiscal policy,but Congress must enact legislation to implement these policies.

In September,2008 ____________ was acquired by Bank of America and _____________ declared bankruptcy when no viable financial alternatives surfaced.

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.

In September,2008 was acquired by Bank of America and _ declared bankruptcy when no viable financial alternatives surfaced.