Question 1

One trait a central bank has over other businesses including banks is that it:

Accepted Answer

A) receives all of its funding from the government. 
B) can control the size of its balance sheet. 
C) doesn't have stockholders. 
D) doesn't have a board of directors. 
A) receives all of its funding from the government. 
B) can control the size of its balance sheet. 
C) doesn't have stockholders. 
D) doesn't have a board of directors.

Question 2

The monetary base is the sum of:

Accepted Answer

A) reserves and M2. 
B) M1 and reserves. 
C) currency in the hands of the public, reserves and M1. 
D) currency in the hands of the public and reserves in the banking system. 
A) reserves and M2. 
B) M1 and reserves. 
C) currency in the hands of the public, reserves and M1. 
D) currency in the hands of the public and reserves in the banking system.

Question 3

If the Fed were to increase the required reserve rate from ten percent to twenty percent, the simple deposit expansion multiplier would:

Accepted Answer

A) double. 
B) increase by 10 percent. 
C) decrease by a factor of ten. 
D) be half as large as it was before the increase. 
A) double. 
B) increase by 10 percent. 
C) decrease by a factor of ten. 
D) be half as large as it was before the increase.

Question 4

To obtain a discount loan from the Fed, a commercial bank must:

Accepted Answer

A) prove that it will fail if it does not obtain the loan. 
B) prove that the loan will be used to make loans. 
C) provide collateral. 
D) agree to more frequent examinations. 
A) prove that it will fail if it does not obtain the loan. 
B) prove that the loan will be used to make loans. 
C) provide collateral. 
D) agree to more frequent examinations.

Question 5

When the Fed makes a discount loan, the impact on the Banking System's balance sheet is:

Accepted Answer

A) an increase in liabilities with no change in assets. 
B) an increase in assets and a decrease in liabilities. 
C) a decrease in assets and an increase in liabilities. 
D) the same as that of an open market purchase. 
A) an increase in liabilities with no change in assets. 
B) an increase in assets and a decrease in liabilities. 
C) a decrease in assets and an increase in liabilities. 
D) the same as that of an open market purchase.

Question 6

In the U.S., loans made by Federal Reserve to banks fall in the categories of:

Accepted Answer

A) discount loans. 
B) reserves. 
C) discount loans and reserves. 
D) discount loans and foreign exchange reserves. 
A) discount loans. 
B) reserves. 
C) discount loans and reserves. 
D) discount loans and foreign exchange reserves.

Question 7

If M = the quantity of money, m the money multiplier, MB the Monetary Base, C = Currency, D = Deposits, R = Reserves, RR = required reserves, and ER = Excess reserves, then RR would equal:

Accepted Answer

A) MB. 
B) D -C. 
C) M/MB. 
D) R - ER. 
A) MB. 
B) D -C. 
C) M/MB. 
D) R - ER.

Question 8

Which of the following have the same impact on the Fed's balance sheet?

Accepted Answer

A) An open market purchase and an increase in loans by the Fed to banks 
B) An open market sale and an increase in foreign exchange reserves 
C) An open market purchase and a decrease in foreign exchange reserves 
D) An increase in loans by the Fed to banks and a decrease in foreign exchange reserves 
A) An open market purchase and an increase in loans by the Fed to banks 
B) An open market sale and an increase in foreign exchange reserves 
C) An open market purchase and a decrease in foreign exchange reserves 
D) An increase in loans by the Fed to banks and a decrease in foreign exchange reserves

Question 9

The collapse of the Thai currency, the baht, was partially due to:

Accepted Answer

A) inaction by the Federal Reserve. 
B) the European Central Bank. 
C) information provided by the central bank of Thailand. 
D) information not provided by the central bank of Thailand. 
A) inaction by the Federal Reserve. 
B) the European Central Bank. 
C) information provided by the central bank of Thailand. 
D) information not provided by the central bank of Thailand.

One trait a central bank has over other businesses including banks is that it:

The monetary base is the sum of:

If the Fed were to increase the required reserve rate from ten percent to twenty percent, the simple deposit expansion multiplier would:

To obtain a discount loan from the Fed, a commercial bank must:

When the Fed makes a discount loan, the impact on the Banking System's balance sheet is:

In the U.S., loans made by Federal Reserve to banks fall in the categories of:

If M = the quantity of money, m the money multiplier, MB the Monetary Base, C = Currency, D = Deposits, R = Reserves, RR = required reserves, and ER = Excess reserves, then RR would equal:

Which of the following have the same impact on the Fed's balance sheet?

The collapse of the Thai currency, the baht, was partially due to:

An Introduction to Money and the Financial System

Money and the Payments System

Financial Instruments, Financial Markets, and Financial Institutions

Future Value, Present Value, and Interest Rates

Understanding Risk

Bonds, Bond Prices, and the Determination of Interest Rates

The Risk and Term Structure of Interest Rates

Stocks, Stock Markets, and Market Efficiency

Derivatives: Futures, Options, and Swaps

Foreign Exchange

The Economics of Financial Intermediation

Depository Institutions: Banks and Bank Management

Financial Industry Structure

Regulating the Financial System

Central Banks in the World Today

The Structure of Central Banks: The Federal Reserve and the European Central Bank

Monetary Policy: Stabilizing the Domestic Economy

Exchange-Rate Policy and the Central Bank

Money Growth, Money Demand, and Modern Monetary Policy

Output, Inflation, and Monetary Policy

Understanding Business Cycle Fluctuations

Modern Monetary Policy and the Challenges Facing Central Bankers

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Exam 17: The Central Bank Balance Sheet and the Money Supply Process

One trait a central bank has over other businesses including banks is that it:

The monetary base is the sum of:

If the Fed were to increase the required reserve rate from ten percent to twenty percent, the simple deposit expansion multiplier would:

To obtain a discount loan from the Fed, a commercial bank must:

When the Fed makes a discount loan, the impact on the Banking System's balance sheet is:

In the U.S., loans made by Federal Reserve to banks fall in the categories of:

If M = the quantity of money, m the money multiplier, MB the Monetary Base, C = Currency, D = Deposits, R = Reserves, RR = required reserves, and ER = Excess reserves, then RR would equal:

Which of the following have the same impact on the Fed's balance sheet?

The collapse of the Thai currency, the baht, was partially due to:

An Introduction to Money and the Financial System

Money and the Payments System

Financial Instruments, Financial Markets, and Financial Institutions

Future Value, Present Value, and Interest Rates

Understanding Risk

Bonds, Bond Prices, and the Determination of Interest Rates

The Risk and Term Structure of Interest Rates

Stocks, Stock Markets, and Market Efficiency

Derivatives: Futures, Options, and Swaps

Foreign Exchange

The Economics of Financial Intermediation

Depository Institutions: Banks and Bank Management

Financial Industry Structure

Regulating the Financial System

Central Banks in the World Today

The Structure of Central Banks: The Federal Reserve and the European Central Bank

Monetary Policy: Stabilizing the Domestic Economy

Exchange-Rate Policy and the Central Bank

Money Growth, Money Demand, and Modern Monetary Policy

Output, Inflation, and Monetary Policy

Understanding Business Cycle Fluctuations

Modern Monetary Policy and the Challenges Facing Central Bankers

Filters