Question 1

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  False

Question 2

Approximately __________ of the nation's commercial banks are members of the Fed.

Accepted Answer

A) three-fourths 
B) two-thirds. 
C) one-third. 
D) one-half. 
E) none of the above 
A) three-fourths 
B) two-thirds. 
C) one-third. 
D) one-half. 
E) none of the above C

Question 3

Which of the following statements is most correct?

Accepted Answer

A) Open-market operations always lead to an immediate increase in the volume of lending; this is especially true when bonds are sold to restrict deposit growth. 
B) Open-market operations don't always lead to an immediate change in the volume of deposits; this is especially true when bonds are purchased to expand deposit growth. 
C) Open-market operations always lead to an immediate change in the volume of deposits; this is especially true when bonds are sold to restrict deposit growth. 
D) Increasing reserve requirements always leads to an immediate increase in the volume of lending; this is especially true when bonds are sold to restrict deposit growth. 
E) none of the above 
A) Open-market operations always lead to an immediate increase in the volume of lending; this is especially true when bonds are sold to restrict deposit growth. 
B) Open-market operations don't always lead to an immediate change in the volume of deposits; this is especially true when bonds are purchased to expand deposit growth. 
C) Open-market operations always lead to an immediate change in the volume of deposits; this is especially true when bonds are sold to restrict deposit growth. 
D) Increasing reserve requirements always leads to an immediate increase in the volume of lending; this is especially true when bonds are sold to restrict deposit growth. 
E) none of the above E

Question 4

The Federal Reserve is empowered to encourage depository institutions to help meet the needs of communities for housing and other purposes:

Accepted Answer

A) through the Community Reinvestment Act 
B) through the Truth in Lending Act 
C) by a provision of the Fair Housing Act 
D) by strictly enforcing usury laws setting maximum interest rates 
A) through the Community Reinvestment Act 
B) through the Truth in Lending Act 
C) by a provision of the Fair Housing Act 
D) by strictly enforcing usury laws setting maximum interest rates

Question 5

Members of the Federal Reserve System may include:

Accepted Answer

A) commercial banks with a national charter 
B) credit unions 
C) savings and loan institutions 
D) all the above 
E) none of the above 
A) commercial banks with a national charter 
B) credit unions 
C) savings and loan institutions 
D) all the above 
E) none of the above

Question 6

The Federal Reserve System replaced the system that existed under the National Banking Act.
Little importance.

Accepted Answer

A) True 
 B)False

Question 7

The Fed has legal responsibility for administering:

Accepted Answer

A) the Bank Holding Company Act of 1956 
B) the Bank Merger Act of 1960 
C) the Change in Bank Control Act of 1978 
D) all of the above 
A) the Bank Holding Company Act of 1956 
B) the Bank Merger Act of 1960 
C) the Change in Bank Control Act of 1978 
D) all of the above

Question 8

The seven-member board of the Federal Reserve that sets monetary policy is called

Accepted Answer

A) the Federal Reserve Open Market Committee 
B) the Federal Reserve Board of Governors 
C) the Federal Reserve Advisory Committee 
D) none of the above 
A) the Federal Reserve Open Market Committee 
B) the Federal Reserve Board of Governors 
C) the Federal Reserve Advisory Committee 
D) none of the above

Question 9

Each member of the Fed Board of Governors is appointed for a term of:

Accepted Answer

A) 8 years 
B) 12 years 
C) 14 years 
D) none of the above 
A) 8 years 
B) 12 years 
C) 14 years 
D) none of the above

Question 10

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called dynamic actions.

Accepted Answer

A) True 
 B)False

Question 11

A major weakness of the banking system under the National Banking Acts was that the money supply could not be easily expanded or contracted to meet changing seasonal needs and/or changes in economic activity.

Accepted Answer

A) True 
 B)False

Question 12

When the Federal Reserve System was created, it was thought that its most important influence over monetary conditions would be:

Accepted Answer

A) lending to banks to bolster their reserve positions 
B) open market operationsquantitative easing 
C) the issuance of Federal Reserve notes 
D) the changing of reserve requirements 
A) lending to banks to bolster their reserve positions 
B) open market operationsquantitative easing 
C) the issuance of Federal Reserve notes 
D) the changing of reserve requirements

Question 13

The Fed discount rate is the interest rate that a bank must pay to borrow from its regional Federal Reserve Bank.

Accepted Answer

A) True 
 B)False

Question 14

Eligible paper that the borrowing institution can sell to the Reserve Bank includes:

Accepted Answer

A) common stock 
B) corporate bonds 
C) U.S.government bonds 
D) all of the above 
A) common stock 
B) corporate bonds 
C) U.S.government bonds 
D) all of the above

Question 15

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 16

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 17

Under the authority of the Federal Reserve Act of 1913:

Accepted Answer

A) member banks were required to purchase capital stock in the Federal Reserve Banks of their district 
B) member banks may not borrow from the Fed 
C) a formal open-market committee arrangement was established 
D) national banks were permitted to become members of the Fed if they could show evidence of satisfactory financial condition 
A) member banks were required to purchase capital stock in the Federal Reserve Banks of their district 
B) member banks may not borrow from the Fed 
C) a formal open-market committee arrangement was established 
D) national banks were permitted to become members of the Fed if they could show evidence of satisfactory financial condition

Question 18

The __________________, passed in 1968, requires the clear explanation of consumer credit costs and garnishment procedures (taking wages or property by legal means) and prohibits overly high-priced credit transactions.

Accepted Answer

A) Consumer Credit Expansion Act 
B) Credit Growth Act 
C) Consumer Credit Protection Act 
D) Consumer Safety Act 
E) none of the above 
A) Consumer Credit Expansion Act 
B) Credit Growth Act 
C) Consumer Credit Protection Act 
D) Consumer Safety Act 
E) none of the above

Question 19

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 20

The Truth in Lending Act:

Accepted Answer

A) prohibits discrimination in the granting of credit on the basis of sex, race, color, and religion 
B) limits liability on lost or stolen credit cards 
C) prohibits unfair or deceptive acts or practices on the part of banks 
D) requires prompt correction of errors on a revolving charge account 
A) prohibits discrimination in the granting of credit on the basis of sex, race, color, and religion 
B) limits liability on lost or stolen credit cards 
C) prohibits unfair or deceptive acts or practices on the part of banks 
D) requires prompt correction of errors on a revolving charge account

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

Approximately __________ of the nation's commercial banks are members of the Fed.

Which of the following statements is most correct?

The Federal Reserve is empowered to encourage depository institutions to help meet the needs of communities for housing and other purposes:

Members of the Federal Reserve System may include:

The Federal Reserve System replaced the system that existed under the National Banking Act. Little importance.

The Fed has legal responsibility for administering:

The seven-member board of the Federal Reserve that sets monetary policy is called

Each member of the Fed Board of Governors is appointed for a term of:

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called dynamic actions.

A major weakness of the banking system under the National Banking Acts was that the money supply could not be easily expanded or contracted to meet changing seasonal needs and/or changes in economic activity.

When the Federal Reserve System was created, it was thought that its most important influence over monetary conditions would be:

The Fed discount rate is the interest rate that a bank must pay to borrow from its regional Federal Reserve Bank.

Eligible paper that the borrowing institution can sell to the Reserve Bank includes:

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:

Under the authority of the Federal Reserve Act of 1913:

The __________________, passed in 1968, requires the clear explanation of consumer credit costs and garnishment procedures (taking wages or property by legal means) and prohibits overly high-priced credit transactions.

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

The Truth in Lending Act:

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

Approximately __________ of the nation's commercial banks are members of the Fed.

Which of the following statements is most correct?

The Federal Reserve is empowered to encourage depository institutions to help meet the needs of communities for housing and other purposes:

Members of the Federal Reserve System may include:

The Federal Reserve System replaced the system that existed under the National Banking Act. Little importance.

The Fed has legal responsibility for administering:

The seven-member board of the Federal Reserve that sets monetary policy is called

Each member of the Fed Board of Governors is appointed for a term of:

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called dynamic actions.

A major weakness of the banking system under the National Banking Acts was that the money supply could not be easily expanded or contracted to meet changing seasonal needs and/or changes in economic activity.

When the Federal Reserve System was created, it was thought that its most important influence over monetary conditions would be:

The Fed discount rate is the interest rate that a bank must pay to borrow from its regional Federal Reserve Bank.

Eligible paper that the borrowing institution can sell to the Reserve Bank includes:

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:

Under the authority of the Federal Reserve Act of 1913:

The __________________, passed in 1968, requires the clear explanation of consumer credit costs and garnishment procedures (taking wages or property by legal means) and prohibits overly high-priced credit transactions.

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

The Truth in Lending Act:

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