Exam 5: Policy Makers and the Money Supply

The "perfect financial storm" that developed in 2008, which put the U.S.economy was on the verge of collapse was characterized by all of the following EXCEPT:

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?

The U.S.Treasury, under the leadership of Treasury Secretary _____________, played an important role in helping the U.S.survive the 2007-09 financial crisis by assisting with the acquisition of Bear Sterns by JP Morgan Chase in March 2008 and by trying to help other financial institutions on the brink of collapse find help through mergers with financially stronger institutions.

The budget-making process rests with the:

40 40.The velocity of money measures the rate at which wire transfers can be transmitted to overseas banks.

The government entity responsible for fiscal policy is:

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

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. Important enough to test? Note sure "a" and "c" weren't involved, too.

Which of the following statements is most correct?

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

Which of the following statements is false?

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

Automatic stabilizers include trade deficits, budget deficits, and floating exchange rates.

The fiscal policy effects of a tax cut occur more slowly than an increase in government spending.

The U.S.Treasury, under the leadership of Treasury Secretary _____________, played an important role in helping the U.S.survive the 2007-09 financial crisis by assisting with the acquisition of Bear Sterns by JP Morgan Chase in March 2008 and by trying to help other financial institutions on the brink of collapse find help through mergers with financially stronger institutions.

Bank reserves are increased when the Treasury: Tired of seeing duplicate items that are a minor change from another item so that the correct answer is "none of the above." I will likely delete more of these---they may play a role but there are a lot of these "duplicate" questions in the test bank for this and other chapters.

The President of the United States and the Fed formulate a program of fiscal policy.

U.S.economic policy actions are directed toward the four general goals of economic growth, high employment, price stability, and balance in international transactions.

A customer of a bank needs additional currency and cashes a check for $10,000.The reserve requirement is 20%.The bank has no excess reserves.It must:

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.